OHB Annual Report 2012 - Oriental Holdings Berhad

Transcription

Contents
PAGE
Notice of Meeting
2
Dividend Announcement
6
Statement of Proposed Renewal of Authority to Purchase its
Own Stocks
7
Corporate Information
11
Profile of Directors
12
Name of Subsidiaries and Associates
19
Group’s Structure as at 31 December 2012
21
Chairman’s Statement
22
Five-Year Group Financial Summary
24
Financial Highlights of the Group
25
Plantation Statistics
26
Financial Calendar
27
Statement on Corporate Governance
28
Other Information and Disclosure
39
Audit Committee Report
42
Terms of Reference of the Audit Committee
45
Statement on Internal Control
49
Corporate Social Responsibility Statement
53
Financial Statements for the Year Ended 31 December 2012
55
Ten Largest Properties of the Group as at 31 December 2012
166
Stockholding Statistics
168
Proxy Form
175
ORIENTAL HOLDINGS BERHAD
(Company No. 5286-U)
(Incorporated in Malaysia)
AND ITS SUBSIDIARIES
Notice of Meeting
NOTICE IS HEREBY GIVEN that the Fifty-First Annual General Meeting of stockholders of the Company
will be held at Sri Mas Ballroom, Level 4, Bayview Hotel Georgetown Penang, 25A Farquhar Street, 10200
Penang on Wednesday, 12 June 2013 at 2.30 pm for the following purposes:
1.
To receive the audited Financial Statements for the year ended 31
December 2012 together with the Directors’ Report and Auditors’
Report thereon.
Ordinary Resolution 1
2.
To declare a Final Single Tier Dividend of 4% for the year ended 31
December 2012.
3.
(i) To re-elect the following Directors who retire in accordance with
Section 129 of the Companies Act, 1965 :
a) Dato’ Robert Wong Lum Kong, DSSA, JP
b) Dato’ Dr Tan Chong Siang
c) YM Tengku Tan Sri Dato’ Seri Ahmad Rithauddeen Bin
Tengku Ismail
d) Puan Sharifah Intan Binti S M Aidid
(ii) To re-elect the following Directors who retire in accordance
with Article 133 of the Company’s Articles of Association :
a) Ms Mary Geraldine Phipps
b) Mr Satoshi Okada
4.
To approve the Directors’ Fees of RM60,000 each for the year ended
31 December 2012.
5.
To re-appoint Messrs KPMG as Auditors of the Company and to
authorise the Directors to fix their remuneration.
2
6.
(i)
As Special Business, to consider and if thought fit, to pass with or
without any modification, the following Ordinary Resolutions :
Proposed New and Renewal of Stockholders’ Mandate for
Recurrent Related Party Transactions of a Revenue or Trading
Nature
“THAT pursuant to Chapter 10.09 of the Listing Requirements of
Bursa Malaysia Securities Berhad, a general mandate of the
Stockholders be and is hereby granted to the Company and/or its
subsidiaries to enter into the recurrent arrangements or transactions
of a revenue or trading nature, as set out in the Company’s Circular
to Stockholders dated 21 May 2013 (“the Circular”) with any
person who is a related party as described in the Circular as
follows, provided that such transactions are undertaken in the
ordinary course of business, on an arm’s length basis, and on
normal commercial terms, or on terms not more favourable to the
Related Party than those generally available to the public and are
not, in the Company’s opinion, detrimental to the minority
stockholders; and that disclosure will be made in the annual report
of the aggregate value of transactions conducted during the
financial year; and that such approval, unless revoked or varied by
the Company in general meeting, shall continue to be in force until
the conclusion of the next Annual General Meeting of the
Company :a)
Recurrent Related Party Transactions of a revenue or trading
nature involving Boon Siew Sdn Bhd Group;
b)
nature involving Dato' Syed Mohamad Bin Syed Murtaza and
family;
c)
nature involving Honda Motor Co. Ltd.;
d)
nature involving Karli Boenjamin;
e)
nature involving Ooi Soo Pheng;
f)
nature involving Tan Liang Chye;
g)
nature involving Datuk Loh Kian Chong.
3
(ii)
Proposed Renewal of Stock Buy-Back
“THAT subject to compliance with Section 67A of the Companies
Act, 1965 (as may be amended, modified or re-enacted from time to
time) and any prevailing laws, rules, regulations, orders, guidelines
and requirements issued by any relevant authorities, approval be and
is hereby given to the Company to utilise up to RM291 million
which represents the audited retained profits reserve of the Company
as at 31 December 2012, otherwise available for dividend for the
time being, to purchase on Bursa Malaysia Securities Berhad its own
stocks up to 62,039,364 ordinary stocks of RM1.00 each
representing 10% of the issued and paid up share capital of the
Company of 620,393,638 ordinary stocks of RM1.00 each as at 25
April 2013 (including 31,808 Stocks retained as Treasury Stocks)
AND THAT upon completion of the purchase(s) of the Stocks by the
Company, the Stocks shall be dealt with in the following manner :i)
ii)
to cancel the Stocks so purchased; or
to retain the Stocks so purchased as treasury stocks for
distribution as dividends to the stockholders and/or resell on the
market of Bursa Malaysia Securities Berhad; or
iii) to retain part of the Stocks so purchased as treasury stocks and
cancel the remainder.
whereby an announcement regarding the intention of the Directors of
the Company in relation to the proposed treatment of the stocks
purchased and rationale thereof will be made to Bursa Malaysia
Securities Berhad AND THAT such authority from the stockholders
would be effective immediately upon passing of this Ordinary
Resolution up till the conclusion of the next Annual General Meeting
(“AGM”) of the Company or the expiry of the period within which
the next AGM is required by law to be held (unless earlier revoked
or varied by Ordinary Resolution in a general meeting of
stockholders of the Company) but not so as to prejudice the
completion of a purchase by the Company or any person before the
aforesaid expiry date, in any event, in accordance with the provisions
of the guidelines issued by Bursa Malaysia Securities Berhad or any
other relevant authorities; AND THAT authority be and is hereby
given to the Directors of the Company to take all such steps as are
necessary or expedient to implement or to effect the purchase of
OHB Stocks.”
(iii)
Retention as Independent Director
“THAT YM Tengku Tan Sri Dato’ Seri Ahmad Rithauddeen Bin
Tengku Ismail be retained as Independent Director of the Company,
in accordance with the Malaysian Code on Corporate Governance
2012 until the conclusion of the next Annual General Meeting.”
7.
To transact any other businesses of which due notice shall have been
given in accordance with the Company’s Articles of Association.
4
By Order of the Board
TAI YIT CHAN (MAICSA 7009143)
ONG TZE-EN (MAICSA 7026537)
Joint Company Secretaries
Penang, 21 May 2013.
Notes :
1.
A member entitled to attend and vote at this meeting may appoint a proxy to attend and, on a poll, to vote on his behalf. A Member may appoint 2 proxies
to attend on the same occasion. A proxy may but need not be a Member and the provisions of Section 149(1)(b) of the Act shall not, apply to the
Company. If a Member appoints 2 proxies, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by
each proxy.
2.
Where a Member of the Company is an exempt authorised nominee which hold ordinary stocks in the Company for multiple beneficial owner in one (1)
securities account (“omnibus account”), there shall be no limit to the number of proxies which the exempt authorised nominee may appoint in respect of
each omnibus account it holds.
An exempt authorised nominee refers to an authorized nominee defined under the Central Depositories Act which is exempted from compliance with the
provisions of subsection 25A(1) of Central Depositories Act.
3.
If the appointer is a corporation, the Proxy Form must be executed under the Common Seal of the Company or under the hand of its attorney duly
authorised in writing.
4.
For a proxy to be valid, the Form of Proxy duly completed must be deposited at the Registered Office of the Company, Suite 2-1, 2nd Floor, Menara
Penang Garden, 42A Jalan Sultan Ahmad Shah, 10050 Penang, Malaysia not less than forty-eight (48) hours before the time appointed for holding the
meeting or at any adjournment thereof.
5.
Should you desire your Proxy to vote on the Resolutions set out in the Notice of Meeting, please indicate with an “X” in the appropriate space. If no
specific direction as to voting is given, the Proxy will vote or abstain at his discretion.
6.
For purpose of determining who shall be entitled to attend this meeting, the Company shall be requesting Bursa Malaysia Depository Sdn. Bhd. to make
available to the Company pursuant to Article 80(3) of the Articles of Association of the Company and Paragraph 7.16(2) of the Main Market Listing
Requirements of Bursa Malaysia Securities Berhad, a Record of Depositors (“ROD”) as at 5 June 2013 and only a Depositor whose name appears on
such ROD shall be entitled to attend this meeting or appoint proxy to attend and/or vote in his/her behalf.
Explanatory Notes on Special Business :
1.
Resolutions pursuant to Proposed New and Renewal of Stockholders’ Mandate for Recurrent Related Party Transactions of a Revenue or
Trading Nature
The Ordinary Resolutions 11 to 17, if passed will approve the stockholders’ mandate on Recurrent Related Party Transactions and allow the Company
and/or its subsidiaries to enter into Recurrent Related Party Transactions in accordance with Chapter 10 of the Listing Requirements of Bursa Malaysia
Securities Berhad. This approval shall continue to be in force until the conclusion of the next Annual General Meeting or the expiration of the period
within which the next Annual General Meeting is required by the law to be held or revoked/varied by resolution passed by the stockholders in general
meeting whichever is the earlier.
2.
Resolution pursuant to Proposed Renewal of Stock Buy-Back
The Ordinary Resolution 18, if passed will allow the Company to purchase its own stocks. The total number of stocks purchased shall not exceed
62,039,364 stocks representing 10% of the issued and paid up share capital of the Company. This authority will, unless revoked or varied by the Company
in general meeting, expires at the next Annual General Meeting of the Company.
3.
Resolution pursuant to Retention as Independent Director
YM Tengku Tan Sri Dato’ Seri Ahmad Rithauddeen Bin Tengku Ismail was appointed as an Independent Director on 9 February 2000. He has served the
Company for a cummulative term of more than 9 years as at the date of the notice of AGM. The Board of Directors has recommended him to continue to
act as Independent Director of the Company based on the justifications as follows:





YM Tengku Tan Sri Dato’ Seri Ahmad Rithauddeen Bin Tengku Ismail fulfils the criteria under the definition on Independent Director as stated in
the Listing Requirements of Bursa Malaysia Securities Berhad and, therefore, is able to bring independent and objective judgment to the Board;
his service in the public sector enables him to share his valuable experience, skills and expertise with the Board and Board Committees;
he has been with the Company long and therefore understands the Company’s business operations which enables him to contribute actively and
effectively during deliberations or discussions at Board and Board Committees meetings;
he has contributed sufficient time and efforts in attending the Board and Board Committees meetings;
he has actively participated in Board deliberations, provided objectivity in decision making and an independent voice to the Board; and
he has exercised due care during his tenure as Independent Non-Executive Director of the Company and carried out his professional duties in the
best interest of the Company and shareholders.
Statement of Accompanying Notice of Annual General Meeting
(Pursuant to Paragraph 8.27(2) of the Listing Requirements)
1.
No individual is seeking election as a Director at the forthcoming Fifty-First AGM of the Company.
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Dividend Announcement
NOTICE IS HEREBY GIVEN that a depositor shall qualify for entitlement to the Final Single Tier
Dividend only in respect of :
a)
Stocks transferred into the Depositor’s Securities Account before 4.00 p.m. on 31 July 2013 in respect of
ordinary transfers; and
b) Stocks bought on Bursa Malaysia Securities Berhad on a cum dividend entitlement basis according to the
Rules of the Bursa Malaysia Securities Berhad.
The Final Single Tier Dividend, if approved, will be paid on 30 August 2013 to depositors registered in the
Records of Depositors at the close of business on 31 July 2013.
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Statement of Proposed Renewal of
Authority to Purchase its Own Stocks
1.
INTRODUCTION
At the AGM of the Company held on 28 June 2012, the Directors had obtained stockholders’ approval to
undertake the Proposed Stock Buy-Back of up to 10% of the issued and paid-up share capital of Oriental
Holdings Berhad (“the Company” or “OHB”) through Bursa Malaysia Securities Berhad (“Bursa
Securities”). The Company’s authority to undertake the Proposed Stock Buy-Back shall, in accordance with
Bursa Securities’s Guidelines Governing Share Buy-Back, lapses at the conclusion of the forthcoming
AGM unless a new mandate is obtained from stockholders for the Proposed Stock Buy-Back.
Accordingly, the Company had on 23 April 2013 announced that the Directors proposed to seek
authorisation from stockholders for a renewal of the Proposed Stock Buy-Back.
The purpose of this Statement is to provide you with the details pertaining to the Proposed Stock Buy-Back
and to seek your approval for the related resolution which will be tabled at the forthcoming AGM.
2.
PROPOSED RENEWAL OF AUTHORITY FOR THE STOCK BUY-BACK
As at the date of this Statement, the Company has bought back 100,000 Stocks from the open market. On 2
March 2001, 68,192 of the Treasury Stocks that were purchased were cancelled.
As at 25 April 2013, the issued and paid up share capital of the Company is RM620,393,638 comprising of
620,393,638 Stocks of RM1.00 each (including 31,808 Stocks retained as Treasury Stocks). The Directors
seek the authority from the stockholders of the Company to purchase its Stocks up to ten per centum (10%)
of the issued and paid-up share capital of OHB or 62,039,364 Stocks for the time being quoted on the Bursa
Securities through its appointed stockbroker, Hwang-DBS Securities Berhad previously notified to the
Bursa Securities.
The new mandate from stockholders will be effective immediately upon the passing of the Ordinary
Resolution for the Proposed Stock Buy-Back up till the conclusion of the next AGM of OHB in the year
2014 unless the authority is further renewed by an Ordinary Resolution passed at the said AGM (either
unconditionally or subject to conditions), or upon the expiration of the period within which the next AGM
is required by law to be held, or if earlier revoked or varied by an Ordinary Resolution of the stockholders
of the Company in a general meeting.
The Proposed Stock Buy-Back is subject to the compliance with Section 67A of the Companies Act, 1965
(as may be amended, modified or re-enacted from time to time) and any prevailing laws, rules, regulations,
orders, guidelines and requirements issued by the relevant authorities at the time of purchase.
In accordance with the guidelines of the Bursa Securities, the Company may only purchase the Stocks on
the Bursa Securities at a price which is not more than fifteen per centum (15%) above the weighted average
market price for the past five (5) market days immediately preceding the date of the purchase(s). The
Company may only resell the treasury stocks on the Bursa Securities at :
a)
a price which is not less than the weighted average market price for the Stocks for the past five (5)
market days immediately prior to the resale; or
b) a discount price of not more than 5% to the weighted average market price for the Stocks for the 5
market days immediately prior to the resale provided that :i) the resale takes place no earlier than 30 days from the date of purchase; and
ii) the resale price is not less than the cost of purchase of the shares being resold.
7
The Directors will deal with the Stocks so purchased in the following manner :a) to cancel the Stocks so purchased; or
b) to retain the Stocks so purchased in treasury for distribution as dividend to the stockholders and/or resell on
the market of the Bursa Securities; or
c) to retain part of the Stocks so purchased as treasury stocks and cancel the remainder.
An appropriate announcement will be made to the Bursa Securities in respect of the intention of the Directors
whether to retain the Stocks so purchased as treasury stocks or cancel them or both as and when the Proposed
Stock Buy-Back is executed.
3.
RATIONALE FOR THE PROPOSED STOCK BUY-BACK
The Proposed Stock Buy-Back will give the Directors the flexibility to purchase Stocks, if and when
circumstances permit, with a view to enhancing the earnings per stock of the Group and net asset per stock
of the Company.
The Proposed Stock Buy-Back is not expected to have any potential material disadvantage to the Company
and its stockholders as it will be exercised only after in-depth consideration of the financial resources of the
Group and of the resultant impact on its stockholders.
3.1 Potential Advantages
The Proposed Stock Buy-Back if exercised, is expected to potentially benefit the Company and its
stockholders as follows :



The Company would expect to enhance the earnings per stock of the Group (in the case where the
Directors resolve to cancel the Stocks so purchased or retain the Stocks in treasury and the treasury
stocks are not subsequently resold), and thereby long term and genuine investors are expected to enjoy
a corresponding increase in the value of their investments in the Company;
If the Stocks bought back are kept as treasury stocks, it will give the Directors an option to sell the
Stocks so purchased at a higher price and therefore make an exceptional gain for the Company.
Alternatively the Stocks so purchased can be distributed as share dividends to stockholders; and
The Company may be able to stabilize the supply and demand of its Stocks in the open market and
thereby supporting its fundamental values.
3.2 Potential Disadvantages
The Proposed Stock Buy-Back, if exercised, will reduce the financial resources of OHB and may result in
OHB having to forego other alternative investment opportunities which may emerge in the future, and it
may reduce the financial resources of OHB for payment of dividends. Nevertheless, the Directors will be
mindful of the interests of OHB and its stockholders when exercising the Proposed Stock Buy-Back.
4.
FINANCIAL EFFECTS OF THE PROPOSED STOCK BUY-BACK
4.1 Share Capital
The Proposed Stock Buy-Back, if carried out in full and the Stocks so purchased are cancelled, the
proforma effect on the issued and paid-up share capital of the Company will be as follows :
Existing as at 25 April 2013
Proposed Stock Buy-Back (10% of the issued and paid up share capital,
including 31,808 Treasury Stocks)
No. of Stocks
620,393,638
62,039,364
558,354,274
However, there will be no effect on the issued and paid-up share capital of OHB if the Stocks so purchased
are retained as Treasury Stocks.
8
4.2 Net Assets Per Stock
The effects of the Proposed Stock Buy-Back on the net assets per stock of the Group are dependent on the
purchase prices of the OHB Stocks and the effective funding cost to the Company.
If all the OHB Stocks purchased are to be cancelled, the Proposed Stock Buy-Back will reduce the net asset
per stock when the purchase price exceeds the net asset per stock at the relevant point in time. However, the
net asset per stock will be increased when the purchase price is less than the net asset per stock at the
relevant point in time. The net asset per stock is RM7.41 as per audited financial statements as at 31
December 2012.
4.3 Working Capital
The Proposed Stock Buy-Back, if exercised, will reduce the working capital of the Group, the quantum of
which depends on the purchase price of OHB Stocks and the actual number of OHB Stocks purchased.
4.4 Earnings Per Stock
The effects of the Proposed Stock Buy-Back on the earnings per stock of the Group are dependent on the
actual number of OHB Stocks bought back and the purchase prices of OHB Stocks and the effective
funding cost to the Company.
4.5 Dividends
Assuming the Proposed Stock Buy-Back is implemented in full and the dividend quantum is maintained at
historical levels, the Proposed Stock Buy-Back will have the effect of increasing the dividend rate of OHB
as a result of the reduction in the issued and paid-up share capital of OHB as described under Section 3.1
above.
5.
SOURCE OF FUNDS FOR THE PROPOSED STOCK BUY BACK
The Proposed Stock Buy-Back will allow the Company to purchase its own stocks at any time within the
above mentioned time period using internally generated funds of the Company.
The actual number of Stocks to be purchased, the total amount of funds to be utilized for each purchase and
the timing of any purchase will depend on the market conditions and sentiments of the stock market, the
financial resources available to the Company as well as the availability of the retained profits reserve and
the share premium reserve of the Company.
The maximum amount of funds to be utilised for the Proposed Stock Buy-Back shall not exceed the
aggregate of the retained profits reserve of the Company, otherwise available for dividend for the time
being. Based on the audited financial statements as at 31 December 2012, the Company’s retained earnings
is RM291 million.
6.
OTHER DISCLOSURES IN RELATION TO THE PROPOSED STOCK BUY BACK
6.1 Public Stockholding Spread
The Proposed Stock Buy-Back will be made in compliance with the 25% stockholding spread as required
by the Listing Requirements of Bursa Securities. As at 25 April 2013, the public stockholding spread of the
Company is approximately 32.3% of its issued share capital.
9
6.2 Purchases and Resale Made in the Previous Twelve (12) Months
OHB has not purchased any stocks in the previous 12 months preceding the date of this Statement. There
was also no resale or cancellation of treasury stocks during the same period.
As at 31 December 2000, OHB had purchased a total of 100,000 of its own stocks and retained as Treasury
Stocks. Out of 100,000 Stocks, 68,192 Stocks have been cancelled on 2 March 2001 and delisted from the
Bursa Securities. The remaining of 31,808 Stocks are retained as Treasury Stocks. Treasury Stocks have no
rights to voting, dividends, bonus issue and participation in other distribution.
6.3 Implication on The Malaysian Code On Take-Overs and Mergers 2010 (“the Code”)
Boon Siew Sdn Bhd, a major stockholder of OHB by virtue of the management control exercised
collectively by Dato’ Seri Loh Cheng Yean, Dato’ Robert Wong Lum Kong, DSSA, JP, Dato’ Seri Lim Su
Tong, Dato’ Dr Tan Chong Siang and Datuk Loh Kian Chong, is deemed to be a Party Acting in Concert
with these Directors.
The Proposed Stock Buy-Back, if fully exercised will result in the equity interest of Boon Siew Sdn Bhd
increasing from 43.0% to 47.8%. If the increase is more than 2% over a 6 month period, Boon Siew Sdn
Bhd will be obliged under Part II of the Code to undertake a Mandatory General Offer for the remaining
ordinary stocks in OHB not already held by them.
The Directors, Dato’ Seri Loh Cheng Yean, Dato’ Robert Wong Lum Kong, DSSA, JP, Dato’ Seri Lim Su
Tong, Dato’ Dr Tan Chong Siang and Datuk Loh Kian Chong and Boon Siew Sdn Bhd will seek Securities
Commission’s approval for a waiver from the obligation to undertake a Mandatory General Offer under
Practice Note 9 of the Code, which is in respect of exemption for holders of voting shares, directors and
persons acting in concert when a company purchases its own voting shares.
In the event the Proposed Waiver is not granted, the Company will not proceed with the Proposed Stock
Buy-Back.
7.
INTERESTS OF
CONNECTED
DIRECTORS,
SUBSTANTIAL
STOCKHOLDERS
AND
PERSONS
The Directors, Substantial Stockholders and Persons Connected with the Directors and/or Substantial
Stockholders of the OHB Group have no direct or indirect interest in the Proposed Stock Buy-Back and
resale of treasury stocks.
8.
DIRECTORS' RECOMMENDATION
Having considered all aspects of the Proposed Stock Buy-Back, the Directors are of the opinion that the
Proposed Stock Buy-Back is in the best interest of the Group. The Directors recommend that you vote in
favour of the resolution pertaining to the Proposed Stock Buy-Back to be tabled at the forthcoming AGM.
9.
BURSA SECURITIES
Bursa Securities takes no responsibility for the contents of this Statement, makes no representation as to its
accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising
from or reliance upon the whole or any part of the contents of this Statement. Bursa has not reviewed this
Statement prior to its issuance.
10
Corporate Information
BOARD OF DIRECTORS
Executive Chairman
Dato’ Seri Loh Cheng Yean
D.G.P.N., D.S.P.N.
Group Managing Directors
Dato’ Robert Wong Lum Kong
D.S.S.A., J.P
Dato’ Seri Lim Su Tong
D.G.P.N., D.S.P.N.
Other Directors
YM Tengku Tan Sri Dato’ Seri Ahmad
Rithauddeen Bin Tengku Ismail
P.M.N., S.P.M.P., S.S.A.P., P.M.K.
Dato’ Dr. Tan Chong Siang
D.S.P.N., D.J.N., P.K.T.
COMPANY SECRETARIES
AUDIT COMMITTEE
Tai Yit Chan (MAICSA 7009143)
Ong Tze-En (MAICSA 7026537)
Chairman
Mary Geraldine Phipps
REGISTERED OFFICE
Members
Sharifah Intan Binti S. M. Aidid
Dato’ Ghazi Bin Ishak
Suite 2-1, 2nd Floor
Menara Penang Garden
42A, Jalan Sultan Ahmad Shah
10050 Penang
Tel No : 04-2294390
Fax No : 04-2265860
REMUNERATION COMMITTEE
Chairman
SHARE REGISTRAR
Members
AGRITEUM Share Registration
Services Sdn. Bhd.
2nd Floor, Wisma Penang Garden
42, Jalan Sultan Ahmad Shah
10050 Penang
Tel No : 04-2282321
Fax No : 04-2272391
NOMINATION COMMITTEE
AUDITORS
Satoshi Okada
Chairman
KPMG, Penang
Chartered Accountants
Members
MAJOR BANKERS
Datuk Loh Kian Chong D.M.S.M.
Datin Loh Ean (Alternate director to
D.S.S.A., J.P)
Tan Kheng Hwee (Alternate director
to Dato’ Seri Loh Cheng Yean)
Dato’ Sri Tan Hui Jing
S.S.A.P., P.K.T., P.J.K.
(Alternate director to
Dato’ Dr. Tan Chong Siang)
RISK MANAGEMENT COMMITTEE
Chairman
EXCO COMMITTEE
Chairman
Members
D.S.S.A., J.P
Datuk Loh Kian Chong
Citibank Berhad
The Nova Scotia Bank Berhad
Standard Chartered Bank Malaysia
Berhad
United Overseas Bank (Malaysia)
Berhad
STOCK EXCHANGE LISTING
Members
D.S.S.A., J.P
Wong Tet Look
Tan Kheng Hwee
Bursa Malaysia Securities Berhad
Main Market
Stock Code : 4006
WEBSITE
www.ohb.com.my
11
Profile of Directors
Dato’ Seri Loh, aged 69, a Malaysian, was appointed to the Board on 6 April 1987. She is the
Group Chairman of Oriental Holdings Berhad since 1995 and Executive Chairman in charge of
Honda automotive division and Hotels & Resorts and overseas investments.
She obtained her higher education in England and began her career as Managing Director of Kah
Motor Company Sdn Bhd, Singapore in 1974. She incorporated the hospitality management
companies, Bayview International Hotels and Resorts Malaysia and Singapore in 1990, and Kah
Power Products Pte. Ltd., Singapore in 2008.
She is one of the four executive directors on the Executive Board of Oriental Holdings Berhad
and is the Executive Chairman of Bayview International Sdn Bhd (Hotels and Resorts) and all the
overseas subsidiaries of Kah Motor Company Sdn Bhd.
She also holds the Chairmanship of Boon Siew Sdn Bhd, a private company, with controlling
interest in Oriental Holdings Berhad as well as the Non-Executive Chairman of Boon Siew Honda
Sdn Bhd, a 49/51 joint venture between Oriental Holdings Berhad and Honda Motor Co. Ltd.,
Japan. She is also the Chairman of Singapore Safety Driving Centre Ltd. and a Director of Bukit
Batok Driving Centre Ltd. and Honda Malaysia Sdn Bhd.
She attended all the 7 Board meetings held in 2012.
She is the sister of Datin Loh Ean, sister-in-law of Dato’ Robert Wong Lum Kong, DSSA, JP,
Dato’ Dr Tan Chong Siang, Dato’ Seri Lim Su Tong, mother of Tan Kheng Hwee and the aunt of
Datuk Loh Kian Chong and Dato’ Sri Tan Hui Jing.
12
Dato’ Robert Wong Lum Kong, DSSA, JP
Dato’ Robert Wong Lum Kong, DSSA, JP, aged 72, a Malaysian, was appointed to the Board on
12 April 1976. He is the Group Managing Director in charge of the automotive division for
Honda distributorship in Malaysia (until 2001) and Hyundai, plastic division and industrial and
commercial property division (Malaysia).
A Chartered Accountant and a Fellow of CPA Australia, Dato’ Wong became a member of CPA
Australia in 1965, followed by membership in the Malaysian Institute of Certified Public
Accountants and the Malaysian Institute of Accountants. He is also a member of The Malaysian
Institute of Directors and a Fellow of The Institute of The Motor Industry.
He has 49 years experience in the business, corporate and entrepreneurship sectors, which started
in 1964 when he assumed the post of General Manager and Director of a manufacturing and
trading concern dealing in non-consumable products. From 1967 to 1971, he joined a Certified
Public Accounting firm as Senior Accountant, and during this period, he was seconded to a Stock
Broking firm for 1½ years to reorganize and manage the business. In 1971, he started his own
Certified Public Accounting firm.
Dato’ Wong joined Oriental Holdings Berhad Group in 1972 as General Manager and Advisor,
with emphasis in the motor and motor-related businesses.
He is one of the four executive directors responsible for the overall business and management
operations of the Group.
In addition, he is the Managing Director of the following Oriental Holdings Berhad subsidiaries,
namely:
 Kah Motor Company Sdn Bhd – (Malaysia’s branches) since 1987;
 Kah Bintang Auto Sdn Bhd;
 Happy Motoring Company Sdn Bhd, exclusive distributor of Honda automobiles in Brunei.
He also established Teck See Plastic Group as an integrated one-stop centre for designing,
compounding and manufacturing of automotive and consumer products.
Dato’ Wong is in charge of the automotive business in Malaysia and Brunei as well as the plastic
division of the Group locally and abroad. He is highly experienced in the motor industry, and has
41 years experience encompassing distribution, assembly and marketing in both car and
motorcycle, as well as the manufacturing of components for the automotive (2-wheelers and 4wheelers), electronics and parts industry both locally and overseas.
Dato’ Wong is also very much devoted to public services and has held some notable memberships
and positions, including among them, Associate Member of Commonwealth Magistrates &
Judges Association, Honorary Rotarian, Trustee of The Spastic Children’s Association of
Selangor and Federal Territory, and Chairman of the 5 th New Honda Circle Asia-Oceania Bloc
Committee.
In recognition for achieving 11 consecutive years (1990 – 2000) in the No. 1 position for Honda
in Malaysia in the non-national passenger car segment, the only company and country in the
world to achieve this magnificient result, Dato’ Wong received formal recognition during this
period from various Honda directors, including the President and Managing Director of Honda
Motor Co. Ltd. (Japan).
13
In recognition of his outstanding and exemplary achievements in entrepreneurship, Dato’ Wong
was awarded the Entrepreneur of the Year Award by Enterprise Asia in its Asia Pacific
Entrepreneurship Awards 2010 (APEA 2010), the Great Entrepreneur Brand Icon Leadership
Award 2011 from the BrandLaureate Asia Pacific Brands Foundation as well as the Malaysia
Business Leadership Awards 2010 – Automotive Award from the Kuala Lumpur Malay Chamber
of Commerce and The Leaders Magazine. In addition, in recognition of his lifetime achievements,
he was awarded the Lifetime Achievement Global Leadership Award 2011 and the Lifetime
Achievement Master Class Award in 2011 from ASEAN Retail Chains & Franchise Federation.
He is a director of several subsidiaries of Oriental Holdings Berhad involving in hotels and
resorts, plantation, property development, healthcare, construction machinery, safety driving
centre, leasing and finance.
He is the Managing Director of Boon Siew Sdn Bhd since 1987, a company, with controlling
interest in Oriental Holdings Berhad, and its subsidiary companies. Amongst his other
directorships, he is a director of Hicom-Honda Manufacturing Malaysia Sdn Bhd, a joint-venture
between DRB-Hicom, Honda and Boon Siew in the manufacture of motorcycle engines and
components. He is also a director of Hitachi Construction Machinery (Malaysia) Sdn Bhd, and
Singapore Safety Driving Centre Ltd.
He was a member of the Audit Committee since its formation on 27 April 1994 until his
resignation on 31 January 2009.
He attended all the 7 Board meetings held in 2012.
He is spouse of Datin Loh Ean. Dato’ Robert Wong Lum Kong, DSSA, JP is the eldest brother-inlaw of Dato’ Seri Loh Cheng Yean, Dato’ Dr. Tan Chong Siang, Dato’ Seri Lim Su Tong and the
uncle of Datuk Loh Kian Chong, Dato’ Sri Tan Hui Jing and Tan Kheng Hwee.
Dato’ Seri Lim, aged 68, a Malaysian, was appointed to the Board on 1 July 1974. He is currently
the Group Managing Director in charge of the property development and plantation divisions of
the Group.
Dato’ Seri Lim, a Bachelor of Arts (Hons) Economics graduate has over 30 years of experience in
business operations.
He is one of the four executive directors responsible for the overall business and management
operations of the Group.
In addition, Dato’ Seri Lim is the CEO of the property development and plantation divisions of
the Group.
He is currently a director of several subsidiaries of Oriental Holdings Berhad involved in hotels
and resorts, automotive industries and plastic parts industries.
He is also a managing director of Boon Siew Sdn Bhd. and Boon Siew Credit Berhad and a
director of Penang Yellow Bus Co. Berhad.
He attended all the 7 Board Meetings held in 2012.
He is the brother-in-law of Dato’ Seri Loh Cheng Yean, Dato’ Robert Wong Lum Kong, DSSA,
JP, Datin Loh Ean, Dato’ Dr Tan Chong Siang and the uncle of Datuk Loh Kian Chong, Dato’ Sri
Tan Hui Jing and Tan Kheng Hwee.
14
YM Tengku Tan Sri Dato’ Seri Ahmad Rithauddeen Bin Tengku Ismail
YM Tengku, aged 81, a Malaysian, is an Independent Non-Executive Director and was appointed
to the Board on 9 February 2000.
YM Tengku, a former Cabinet Minister, served with the government for 20 years in various
ministries as Minister of Foreign Affairs, Minister of International Trade and Industry, Minister at
the Prime Minister’s Office and Minister of Defence before retiring in 1990.
Tengku holds a Bachelor of Law degree from the University of Nottingham, United Kingdom and
is a Barrister-at-Law from Lincoln’s Inn.
He is also currently the Pro-Chancellor of University Kebangsaan Malaysia, Chairman of
University of Nottingham Malaysia Sdn. Bhd., President of United Nations Association Malaysia
and Honorary President for Life of Islamic Chambers of Commerce Malaysia. Tengku is a
member of Advisory Trustee of Uthant Institute Inc., New York, USA.
YM Tengku was also awarded Foreign Orders and Decorations by the Federal Republic of
Germany, Saudi Arabia, Republic of Korea and Thailand.
In January 2002, YM Tengku was conferred Doctor of Laws (Honoris Causa) by the University of
Nottingham and also conferred Doctor of Philosophy by Universiti Kebangsaan Malaysia in
August 2007.
He is the Chairman of the Nomination Committee and Remuneration Committee; and a member
of Audit Committee.
He attended 5 out of 7 Board Meetings held in 2012.
YM Tengku does not have any family relationship with any other Director and/or major
stockholder of the Company.
Dato’ Dr Tan Chong Siang
Dato’ Dr Tan, aged 72, a Malaysian, is a Non-Independent Non-Executive Director and has been
a board member since 7 April 1995.
Dato’ Dr Tan is a medical specialist by profession and the Chief Executive Officer of two private
hospitals.
He is a member of the Remuneration Committee.
He attended all the 7 Board Meetings held in 2012.
He is the brother-in-law of Dato’ Seri Loh Cheng Yean, Dato’ Robert Wong Lum Kong, DSSA,
JP, Datin Loh Ean, Dato’ Seri Lim Su Tong and father of Dato’ Sri Tan Hui Jing. He is the uncle
of Datuk Loh Kian Chong and Tan Kheng Hwee.
15
Datuk Loh Kian Chong, aged 37, a Malaysian, was appointed to the Board as an Executive
Director on 15 May 2009. Datuk Loh Kian Chong holds a Bachelor of Business in Property
Degree from Royal Melbourne Institute of Technology (RMIT).
He began his career as Director of Boon Siew Group of Companies in 2000. In May 2007, he
was appointed as Deputy Chairman of Boon Siew Sdn. Bhd. He is a major shareholder of Boon
Siew Sdn Bhd. and a major stockholder of Oriental Holdings Berhad.
He is a director of Penang Yellow Bus Company Berhad and Boon Siew Credit Berhad.
He is the nephew of Dato’ Seri Loh Cheng Yean, Dato’ Robert Wong Lum Kong, DSSA, JP,
Datin Loh Ean, Dato’ Dr Tan Chong Siang, Dato’ Seri Lim Su Tong and the cousin of Dato’ Sri
Tan Hui Jing and Tan Kheng Hwee.
Sharifah Intan Binti S M Aidid
Puan Sharifah, aged 78, a Malaysian, is a Non-Independent Non-Executive Director. She was
appointed as a Director on 25 July 2002.
After 20 years in the teaching profession, she took up law in 1980, and was called to the Bar in
1985. She is currently a consultant of Messrs. Lim Huck Aik & Co, Advocates & Solicitors.
In addition, she is a director of Boon Siew Honda Sdn. Bhd., Penang Yellow Bus Co. Berhad and
Chainferry Development Sdn. Bhd..
She is a member of the Audit Committee, Nomination Committee and Remuneration Committee.
She attended all the 7 Board Meetings held in 2012.
Puan Sharifah does not have any family relationship with any other Director and/or major
Satoshi Okada
Mr. Satoshi Okada, aged 47, a Japanese was appointed to the Board as a Non-Independent NonExecutive on 18 May 2011.
Mr. Satoshi Okada holds a Bachelor of Economic from Wakayama University, Wakayama Japan.
On 1st April 1988, he joined Honda Motor Co., Ltd and he has had experience in overseas three
times before Malaysia.
In 1993, he worked at Kwang Yang Motor in Taiwan and was appointed as Assistant to President
of Honda Philippines Inc. in 2001. In 2007, he was appointed as Marketing Director of Astra
Honda Motor, Indonesia. Currently he is the Managing Director and Chief Executive Officer of
Boon Siew Honda Sdn. Bhd.
Mr. Satoshi Okada is the representative of Honda Motor Co., Ltd. He does not have any family
relationship with any other Director and/or major stockholder of the Company.
16
Ms. Mary Geraldine Phipps, aged 64, a Malaysian, was appointed to the Board as an Independent
Non-Executive Director of the Company on 14 August 2009. In 1976, she became a member of
the Malaysian Institute of Certified Public Accountants and a member of the Malaysian Institute
of Accountants in 1982. In 1992, she became a member of the Malaysian Institute of Taxation and
is currently a Fellow of the Malaysian Institute of Taxation.
She joined KPMG, Penang as an articled student in 1969 and remained in public practice until her
retirement in December 2004. In 1982, she was made a partner of KPMG and in 1990 she was
appointed Managing Partner of KPMG Penang practice. During this time, she was also a Director
of KPMG Tax Services Sdn Bhd. Her expertise is in taxation and her experience in tax advisory
and consultancy services covered a diversified range of industries. She was the Tax/Client Partner
for multinational clients of KPMG’s overseas offices which have manufacturing facilities in
Penang.
She currently sits on the Board of SLP Resources Berhad.
She is the Chairman of the Audit Committee and Risk Management Committee. She is also a
member of Nomination Committee and Remuneration Committee.
She attended 6 out of 7 Board Meetings held in 2012.
She does not have any family relationship with any other Director and/or major stockholder of the
Company.
Dato’ Ghazi, aged 69, a Malaysian, was appointed to the Board as an Independent Non-Executive
Director on 22 September 2010.
Dato’ Ghazi, a lawyer by profession is a Barrister at Law from Lincoln’s Inn London, United
Kingdom. He was called to the English Bar in 1971 and joined the Malaysian Government Legal
Services upon his return in 1971. He was posted as a Magistrate in Kuala Lumpur and later as
Acting President of Sessions Court in Malacca and Kuala Kubu Bahru. He was appointed as
Deputy Public Prosecutor Penang in 1975 and for a spell acted as State Legal Adviser, Penang.
He resigned from Government Service on 31 December 1976 and joined a legal firm, Messrs
Presgrave & Matthews, as a Partner from 1 March 1977 until 1992 when he formed Messrs Ghazi
& Lim.
Dato’ Ghazi is one of the most prominent litigation lawyers in Malaysia having litigated in
landmark Malaysian cases in fields ranging from criminal, commercial, company, banking,
construction, constitutional, land law and complex probate and administration matters involving
jurisdictions in Australia, Singapore, America and England. He also handles labour, employment
and industrial disputes. Dato’ Ghazi also advises local authorities and other statutory bodies,
including Universiti Sains Malaysia.
His corporate experience includes joint venture agreements involving foreign partners. He
currently sits on the Board of Wing Tai Malaysia Berhad.
He is a member of Audit Committee and Nomination Committee.
Dato’ Ghazi does not have any family relationship with any other Director and/or major
17
Datin Loh Ean
Datin Loh Ean, aged 71, a Malaysian, was appointed as an Alternate Director to Dato’ Robert
Wong Lum Kong, DSSA, JP on 9 September 2010. Datin Loh Ean obtained higher education in
England.
She started work in Boon Siew Sdn Bhd since 1965. She is a Director of Boon Siew Credit
Berhad, Penang Yellow Bus Company Berhad, NGK Spark Plugs Malaysia Bhd., certain
subsidiaries and associated companies of Oriental Holdings Berhad and Boon Siew Sdn Bhd.
She is the spouse of Dato’ Robert Wong Lum Kong, DSSA, JP. She is the eldest sister of Dato’
Seri Loh Cheng Yean. She is the eldest sister-in-law of Dato’ Dr Tan Chong Siang, Dato’ Seri
Lim Su Tong and the aunt of Datuk Loh Kian Chong, Dato’ Sri Tan Hui Jing and Tan Kheng
Hwee.
Tan Kheng Hwee
Ms. Tan Kheng Hwee, aged 47, a Singaporean, was appointed to the Board as an Alternate
Director to Dato’ Seri Loh Cheng Yean on 1 August 2011.
Ms Tan holds a Bachelor of Arts in Economics, Cornell University and also a MBA in Finance,
New York University. She worked in Deloitte and Touche in New York City (International Tax)
for a year before joining Kah Motor Singapore Branch as a Finance Manager. She is currently the
Deputy Managing Director in Kah Motor Singapore Branch.
She is a director of Boon Siew Credit Berhad and Penang Yellow Bus Company Berhad.
She is the daughter of Dato’ Seri Loh Cheng Yean. She is the niece of Dato’ Robert Wong Lum
Kong, DSSA, JP, Datin Loh Ean, Dato’ Dr Tan Chong Siang, Dato’ Seri Lim Su Tong and the
cousin of Datuk Loh Kian Chong and Dato’ Sri Tan Hui Jing.
Dato’ Sri Tan Hui Jing
Dato’ Sri Tan Hui Jing, aged 31, a Malaysian, was appointed to the Board as an Alternate
Director to Dato’ Dr Tan Chong Siang on 5 May 2010. Dato’ Sri Tan Hui Jing holds a Bachelor
of Business Systems from Monash University, Clayton Australia.
He began his career as Sales and Marketing Executive in Boon Siew Sdn. Bhd. in 2004. In 2006,
he was appointed as Director of Boon Siew Honda Sdn. Bhd.. Currently, he is a Deputy Chairman
of Boon Siew Honda Sdn. Bhd.
He is the son of Dato’ Dr Tan Chong Siang, the nephew of Dato’ Seri Loh Cheng Yean, Dato’
Robert Wong Lum Kong, DSSA, JP, Datin Loh Ean, Dato’ Seri Lim Su Tong and the cousin of
Datuk Loh Kian Chong and Tan Kheng Hwee.
………………………………………………………………………………………………………………………
Notes:
(a) Conflict of Interest
None of the Directors has any conflict of interest with the Group.
(b)
Convictions of Offences
None of the Directors has been convicted of any offences within the past 10 years.
18
Name of Subsidiaries and Associates
AAP
ACP
ACPV
AI
AR
ATS
ATTS
BBDS
Bint
BSB
BSH
BSKah
CC
ChDev
DF
Gbay
HAP
HCM
HM
HS
HTSM
Juta
KC
Kah M
KAust
KBA
Ken
KMA
KNZ
KP
KPCL
KST
KTSM
KWE
KU
LBSE
LEM
LMold
LT
MSM
NILAM
NME
NMEO
NMX
OA
OAM
OAMS
Armstrong Auto Parts Sdn. Berhad
Armstrong Cycle Parts (Sdn). Berhad
Armstrong Component Parts (Vietnam) Co., Ltd
Armstrong Industries Sdn. Bhd.
Armstrong Realty Sdn. Bhd.
Armstrong Trading & Supplies Sdn. Bhd.
AT-TS Marketing Sdn. Bhd.
Bukit Batok Driving Centre Ltd.
Bayview International Sdn. Bhd.
Boon Siew (Borneo) Sendirian Berhad
B. S. Kah Pte. Ltd.
Compounding & Colouring Sdn. Bhd.
Chainferry Development Sdn. Berhad
Dragon Frontier Sdn. Bhd.
Geographe Bay Motel Unit Trust
Honda Autoparts Manufacturing (M) Sdn. Bhd.
Hitachi Construction Machinery (Malaysia) Sdn. Bhd.
Happy Motoring Company Sdn. Bhd.
Hymold (Su Zhou) Co., Ltd.
Hicom Teck See Manufacturing Malaysia Sdn. Bhd.
Jutajati Sdn. Bhd.
Kah Classic Auto Sdn. Bhd.
Kah Motor Company Sdn. Berhad
Kah Australia Pty. Limited
Kah Bintang Auto Sdn. Bhd.
Kenanga Mekar Sdn. Bhd.
KM Agency Sdn. Bhd.
Kah New Zealand Limited
Kah Power Products Pte. Ltd.
Kingdom Properties Co. Limited
Kasai Teck See Co. Ltd.
Kasai Teck See (Malaysia) Sdn. Bhd.
Kwong Wah Enterprise Sdn. Bhd.
Konkrit Utara Sdn. Bhd.
Loh Boon Siew Education Sdn. Bhd.
Lipro Electrical Manufacturing Sdn. Bhd.
Lipro Mold Engineering Sdn. Bhd.
Lipro Trading Sdn. Bhd.
Melaka Straits Medical Centre Sdn. Bhd.
Nilam Healthcare Education Centre Sdn. Bhd.
North Malaya Engineers Trading Company Sdn. Berhad
North Malaya Engineers Overseas Sdn. Bhd.
North Malaya (Xiamen) Steel Co. Ltd.
Oriental Assemblers Sdn. Bhd.
Oriental Asia (Mauritius) Pte. Ltd.
OAM Asia (Singapore) Pte. Ltd.
19
Name of Subsidiaries and Associates (cont’d)
OBSM
OBS(M)
OBSS
OC
OIM
OIW
OKPI
OL
ONDE
OR
ORPO
OSI
PgA
PSH
PT DAM
PT GBina
PT GML
PT GSSL
PT BSSP
PT PPA
PT OMI
PWR
SBHL
SBIOM
SBO
SBL
SP
SPP
SOrien
SSDC
SU
TSP
UG
UMix
UniMix
UP
UMS
Oriental Boon Siew (Mauritius) Pte. Ltd.
Oriental Boon Siew (M) Sdn. Bhd.
OBS (Singapore) Pte. Ltd.
Syarikat Oriental Credit Berhad
Oriental International (Mauritius) Pte. Ltd.
Oriental Industries (Wuxi) Co. Ltd.
Oriental Kyowa Plastic Industries (Shanghai Pudong New Area) Co. Ltd.
Onward Leasing & Credit Sdn. Bhd.
Oriental Nichinan Design Engineering Sdn. Bhd.
Oriental Realty Sdn. Berhad
Oriental Rubber & Palm Oil Sdn. Berhad
Oriental San Industries Sdn. Bhd.
Penang Amusements Company Sdn. Bhd.
Park Suanplu Holdings Co., Ltd.
PT Dapo Agro Makmur
PT Gunungsawit Binalestari
PT Gunung Maras Lestari
PT Gunung Sawit Selatan Lestari
PT Bumi Sawit Sukses Pratama
PT Pratama Palm Abadi
PT Oriental Manufacturing Indonesia
Penang Wellesley Realty Sdn. Berhad
Silver Beech Holdings Limited
Silver Beech (IOM) Limited
Silver Beech Operations UK Limited
Suanplu Bhiman Limited
Selasih Permata Sdn. Bhd.
Southern Perak Plantations Sdn. Berhad
Southern Oriental Sdn. Bhd.
Singapore Safety Driving Centre Ltd.
Simen Utara Sdn. Bhd.
Teck See Plastic Sdn. Bhd.
Ultra Green Sdn. Bhd.
Unique Mix (Penang) Sdn. Bhd.
Unique Mix Sdn. Bhd.
Unique Pave Sdn. Bhd.
Unique Mix (Singapore) Pte. Ltd.
20
Group’s Structure as at 31 December 2012
Group’s Structure
Investments Holdings &
Financial Services
Plastics
Automobile & Related
Products
Property Development &
Related Products
Kah M
KBA
LEM
ATTS
KWE
NMEO
OR
AI
BSB
HM
TSP
CC
Juta
SP
NME
UG
AAP
ACPV
ONDE
OSI
OBSM
OBSS
AR
SU
OA
ACP
DF
OKPI
OAM
OIM
UP
UMIX
ATS
KP
KTSM
OIW
OAMS
OL
Ken
NMX
KC
KMA
HS
LMold
OC
UMS
KU
LT
HAP
BSH
PT OMI
KST
UniMix
OBS(M)
BBDS
SSDC
Hotels & Resorts
HTSM
BSKah
SOrien
- Bayview Geographe Resort,WA
- Bayview Eden, Melbourne
- The Sydney Boulevard Hotel
- Bayview on the Park, Melbourne
- 100 William Street
- Bayview Chateau Tongariro
- Bayview Wairakei Resort
ORPO
PT GML
PT GBina
PT BSSP
PT DAM
PT PPA
-Sydney Boulevard
Kah M
- Bayview Hotel Melaka
- Bayview Hotel Singapore
SPP
Healthcare & Others
MSM
LBSE
NILAM
PgA
G Bay
SBHL
Bint
PT GSSL
ChDev
K Aust
KNZ
Plantations
PWR
SBO
PSH
HCM
SUBSIDIARIES
SBIOM
ASSOCIATES
SBL
KPCL
21
Chairman’s Statement
On behalf of the Board of Directors of Oriental Holdings Berhad (“OHB”), I am pleased to present to you the
Annual Report and Audited Financial Statement of the Company and of the Group for the financial year ended
31 December 2012.
For the financial year ended 31 December 2012, the Group recorded revenue of RM2.8 billion, a decrease of
10% from RM3.1 billion in 2011. Profit after tax also dropped in tandem by 18% to RM302.6 million from
RM369.2 million in 2011. Profit attributable to shareholders decreased by 25.8% to RM200.6 million,
translating to an earnings per stock of 32.34 sen as compared with 43.55 sen in the previous year. However, net
asset per share rose to RM7.41 from RM7.09.
As global economic recovery remains uncertain, the Group is continuously focused on managing its businesses
in a prudent manner to increase long term shareholders’ value. Some of the Board’s ongoing sustainable
strategies are formulating achievable objectives for day to day management, balancing benefits and risks in new
investments and plans, cost optimization as well as effective and efficient financial and cash flow management.
YEAR UNDER REVIEW
The Group currently sells Honda automobiles through dealership held by its wholly owned subsidiary, Kah
Motor Company Sdn Berhad (KM) in Malaysia and distributorship in Singapore and Brunei. The Group also
sells Hyundai cars (both CBU and CKD versions) via its subsidiary, Kah Bintang Auto Sdn Bhd. The
performance of the automotive division was impacted by negative contribution from auto parts manufacturing
and vehicle assembly business units due to higher overhead cost from scaling back production as a result of
competition from alternate sources for auto component supply.
As for the plantation division, Malaysia CPO prices in 2012 weakened by 14.1% or RM454 per MT to RM2,764
against RM3,218 in 2011 due to reduced demand worldwide coupled with high levels of inventory in the
country. Accordingly, FFB prices decreased by an average of RM121 to RM600 per MT in 2012 from RM721
in 2011. Total FFB production from our Malaysian plantations in 2012 amounted to 94,465 MT compared to
101,770 MT in 2011, the decline being attributed to cyclical factors and weather conditions. However, the yield
per hectare in 2012 at 21.22 MT per hectare mirrored 21.24 MT per hectare recorded in 2011.
Our Indonesian plantations performance was also affected by the softer commodity prices. Average CPO prices
weakened by 14.8% or RM400 per MT to RM2,300 against RM2,700 in 2011. Total FFB production in 2012
increased by 5% to 533,378 MT when compared to 509,485 MT reported in the previous year. Average yield
per hectare increased slightly to 25.61 MT from 24.79 MT in 2011.
As a whole, the plantation division is operating at par with industry standards. The Board is confident that the
plantation division will continue to contribute positively towards the Group’s profitability.
Revenue from the Group’s hospitality division improved with contribution coming mainly from the two newly
acquired hotels in Thailand and UK, namely, Park Suanplu Holdings Co. Ltd and Silver Beech Operations UK
Limited. However, average room rates and occupancy rates for all properties were generally lower compared to
2011 thus eroding the profit margin for the year. The division will continuously look into effective strategies
and further enhance customer service levels in order to achieve greater efficiency in all areas of operation.
DIVIDEND
Based on the stock capital of 620,361,830 (after deducting 31,808 Treasury Stocks), a single tier interim
dividend of 4.0%, totalling RM24,814,473 will be paid on 10 May 2013. The Board has also recommended a
final single tier dividend of 4.0% totalling RM24,814,473. In total, the dividend distribution for the year will
amount to RM49,628,946 or 16.4% of the net profit for the year.
22
OUTLOOK
Going forward, the Group’s operating environment is expected to remain challenging in view of uncertainties
surrounding the global economy and the spillover impact on our domestic economy. In the face of fierce
competition in all the markets we are in, profitability of the Group could be affected. The Group is however well
positioned to meet changing market needs and business goals as it continually realigns its business strategies,
which are anchored on innovative measures and strong governance, and leveraged on human capital strength
and competitiveness to sustain growth. The Group’s strong balance sheet and prudent management will enable it
to maintain a competitive edge in its core businesses.
The automotive division is expected to remain competitive given the changing market trend and increase in new
players in the domestic and overseas markets. The division will continue to focus on quality, cost control and
strengthening its network as part of an initiative to restructure its business model.
The Group has built up a sizeable acreage of plantation land in Indonesia and will continue to acquire planted
estates or more land suitable for palm oil cultivation when the opportunity arises. Whilst FFB & CPO prices are
beyond its control, management will continue to keep up efforts to control the costs of FFB and CPO
production.
As for the Group’s hospitality division, the management will optimize performance of the existing assets and
improve operational execution through various organic measures. Management will also consider strategic
investment opportunities for future growth.
The property division will see an increase in its land bank following ongoing reclamation works on the
remaining 501 acres of the concession in Melaka.
The Group expects the healthcare sector to contribute positively to the Group upon commencement of
operations of its medical centre in Melaka.
The Group will continue to map out both short and long term strategies to maximize investment opportunities
that can add to stockholders’ value.
RETURN TO STOCKHOLDERS
A holding of 1,000 stocks in Oriental when it was listed in 1964 would translate into 48,306 Oriental stocks
worth RM420,262, based on the share price of RM8.70 at the end of 2012. In addition, the stocks would have
earned a total gross dividend of RM160,690. The gross dividends received and the appreciation in value is
equivalent to a remarkable average rate of return of 13.87% for each of the 49 years.
ACKNOWLEDGEMENT
On behalf of the Board, I wish to thank the Board committees, management and staff for their professionalism,
dedication and commitment towards the continued success of the Group. Our appreciation also goes to our
stockholders, customers, business associates and regulatory authorities for their on going support.
DATO’ SERI LOH CHENG YEAN
Chairman
23 April 2013
23
Five-Year Group Financial Summary (RM’million)
2012
2011
2010
2009
2008
620.4
595.8
3,381.1
(0.2)
620.4
542.2
3,236.3
(0.2)
620.4
514.2
3,003.3
(0.2)
517.0
504.7
2,897.2
(0.2)
517.0
395.1
2,669.2
(0.2)
Total equity attributable to
stockholders of the Company
Minority interest
4,597.1
4,398.7
4,137.7
3,918.7
3,581.1
728.3
669.6
601.0
559.1
474.7
TOTAL EQUITY
5,325.4
5,068.3
4,738.7
4,477.8
4,055.8
Property, plant and equipment
Intangible assets
Biological assets
Investment properties
Land held for property development
Prepaid land lease payments
Investments
Current assets
Deferred tax assets
1,338.3
52.0
214.1
492.5
35.8
40.0
647.4
3,309.7
8.0
1,117.9
57.3
166.2
487.9
37.8
40.5
540.2
3,511.5
6.3
1,241.2
32.3
137.1
72.6
167.5
52.5
542.0
3,262.5
3.8
1,311.1
32.1
144.5
62.3
158.2
53.1
407.6
3,026.2
9.5
1,097.1
42.4
128.2
55.9
180.6
137.4
412.8
2,986.9
12.3
TOTAL ASSETS
6,137.8
5,965.6
5,511.5
5,204.6
5,053.6
TOTAL LIABILITIES
(812.4)
(897.3)
(772.8)
(726.8)
(997.8)
5,325.4
5,068.3
4,738.7
4,477.8
4,055.8
375.7
(73.2)
461.1
(91.8)
384.4
(76.5)
431.1
(93.9)
477.5
(115.5)
302.5
(101.9)
369.3
(99.1)
307.9
(58.4)
337.2
(66.5)
362.0
(48.4)
200.6
270.2
249.5
270.7
313.6
49.6
8.0
55.8
9.0
55.8
9.0
38.8
10.0
62.0
16.0
FINANCIAL POSITION ANALYSIS
Share capital
Reserves
Retained earnings
Treasury stocks
OTHER DATA
Profit before taxation
Taxation
PROFIT FOR THE YEAR
Minority interests
NET PROFIT ATTRIBUTABLE TO
STOCKHOLDERS OF THE
COMPANY
DIVIDEND
Net - RM'million
Gross rate - %
24
Financial highlights of the Group
Profit Before Taxation
Turnover
Year
Year
Shareholders’Fund
*Earnings Per Stock
Year
* Adjusted for 2010 Bonus Issue
Year
*Market Price
Gross Dividends
Year
Year
* Adjusted for 2010 Bonus Issue
25
Plantation Statistics
2012
2011
I
Estates - Malaysia & Indonesia
A
1
2
3
4
5
6
7
Area Statement
Matured
Immature
Total Planted
Plantable
Sub total
Buildings, roads, etc
Total
Ha
Ha
Ha
Ha
Ha
Ha
Ha
25,280
2,729
28,009
47,282
75,291
1,641
76,932
25,341
2,313
27,654
47,637
75,291
1,630
76,920
B
Matured
Ha
25,280
25,341
C
FFB Yield per Hectare
MT
24.84
24.12
D
Estate FFB Production
MT
627,843
611,255
II
Oil Mills - Indonesia
A
1
2
3
FFB Throughput
Own Estates
External
Total
MT
MT
MT
533,378
121,493
654,871
509,485
231,218
740,703
B
1
2
Extraction Rates
CPO
Palm Kernel
%
%
20.55
5.32
20.89
5.15
C
1
2
Production
CPO
Palm Kernel
MT
MT
134,545
34,829
154,712
38,129
III
1
a
b
c
d
2
Age Profile of Planted Area - 31/12/12
Matured
Young (4 to 7 years)
Prime (8 to 18 years)
Due (more than 18 years)
Sub total
Immature
Hectares
Hectares
835
22,564
1,881
25,280
2,729
1,141
22,629
1,572
25,341
2,313
28,009
27,654
2012
2011
√
√
√
√
√
√
√
√
√
√
√
√
√
√
3
IV
1
a
b
c
d
e
f
2
a
Total Planted
Data - Comprises of
Indonesia
PT Gunung Maras Lestari
PT Gunungsawit Binalestari
PT Bumi Sawit Sukses Pratama
PT Gunung Sawit Selatan Lestari
PT Pratama Palm Abadi
PT Dapo Argo Makmur
Malaysia
Oriental Rubber & Palm Oil Sdn Bhd
26
Financial Calendar
FINANCIAL YEAR END
31 December 2012
ANNOUNCEMENT OF RESULTS
Quarter ended 31 March 2012
24 May 2012
Quarter ended 30 June 2012
27 August 2012
Quarter ended 30 September 2012
22 November 2012
Quarter ended 31 December 2012
28 February 2013
DIVIDENDS
Payment of Interim Dividend for Year 2011
Payment of Final Dividend for Year 2011
Payment of Interim Dividend for Year 2012
Proposed Final Dividend for Year 2012
POSTING OF ANNUAL REPORT AND FINANCIAL STATEMENTS TO
STOCKHOLDERS
11 May 2012
14 September 2012
10 May 2013
23 April 2013
21 May 2013
12 June 2013
ANNUAL GENERAL MEETING
27
Statement on Corporate Governance
The Board of Directors (the “Board”) is committed to implementing and maintaining high standards of
corporate governance in promoting transparency, accountability and integrity to enhance shareholder value. As
such, the Board strives to adopt the substance behind corporate governance prescriptions and not merely the
form.
The Board is pleased to provide the following Statement, which sets out how the Company has applied the
Principles and Recommendations as promulgated by the Malaysian Code on Corporate Governance 2012 (the
“MCCG 2012”) during the financial year under review following the release of the MCCG 2012 by the
Securities Commission in late March 2012. Non-observation of specific Recommendation of the MCCG 2012
during the financial year, including the reasons thereof and alternative practice, if any, is included in this
Statement.
Principle 1 Establish clear roles and responsibilities of the Board and Management
Duties and Responsibilities of the Board
The Board recognises the vital role played by the Board in the stewardship of its direction and operations, and
ultimately the enhancement of long-term shareholder value. To fulfil its role, the Board has assumed and
established the following responsibilities in discharging its fiduciary and leadership functions:






reviewing and adopting a strategic plan for the Group to ensure sustainability of its business as the Board
brings objectivity and breadth of judgement to the Group’s operations;
overseeing the conduct of the Group’s businesses and performance of Management to determine whether or
not its businesses are being properly managed;
identifying principal risks for the Company and its subsidiaries and ensuring the implementation of
appropriate internal controls and mitigating measures to address such risks;
succession planning, including appointing, training, fixing the compensation of and, where appropriate,
replacing members of the Board and Senior Management;
overseeing the development and implementation of a shareholder communications policy for the Company;
and
reviewing the adequacy and integrity of the Group’s risk management and internal control system..
To assist in the discharge of its stewardship role, the Board has established Board Committees, namely the
Executive Committee, Audit Committee, Remuneration Committee, Nominating Committee and Risk
Management Committee, to oversee matters within their specific terms of reference as approved by the Board
and report to the Board on key issues deliberated at their respective meetings. The ultimate responsibility for
decision making, however, lies with the Board.
Board Charter
To enhance accountability, the Board has established clear functions reserved for the Board and those delegated
to Management. There is a formal schedule of matters reserved to the Board for its deliberation and decision to
ensure the direction and control of the Company are in its hands. Key matters reserved for the Board include
setting the overall group strategy and direction, approving acquisitions and divestitures, annual operating and
capital budgets, quarterly and annual financial statements for announcement as well as monitoring of financial
and operating performance of the Group. Whilst the Board is responsible for creating the framework and
policies within which the Group should be operating, Management is responsible for instituting measures on
compliance with laws, regulations, rules, directives and guidelines, including the achievement of the Group’s
corporate objectives. Such delineation of roles is clearly set out in the Board Charter which serves as a reference
point for Board activities and reinforces the supervisory role of the Board.
In early 2013, the Board revised its Board Charter to take into account the Recommendations promulgated by
the MCCG 2012 and changes to the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa”),
including Board dynamics. Efforts will be taken to upload the salient features of the revised Charter on the
Company’s website at www.ohb.com.my.
28
Code of Ethics and Whistle Blowing Policy
The Board has also formalized in writing a Code of Ethics in early 2013, setting out the standards of ethics and
conduct expected from Directors and employees to uphold good corporate behaviour. To complement the Code
of Ethics, the Company’s existing whistle blowing policy was also enhanced accordingly to outline when, how
and to whom a concern may be properly raised about the actual or potential corporate fraud or breach of ethics
involving employee, Management or Director in the Group. All concerns reported by the whistle blower are
made to the Chairman of the Audit Committee according to the form and specific conditions prescribed under
the policy. The identity of the whistle blower is kept confidential and protection is accorded to the whistle
blower against any form of reprisal or retribution.
The Board recognises the importance on adherence to the Code of Ethics by all personnel in the Group and will
take measures to put in place a process to ensure its compliance, including efforts to upload a summary of the
Code of Ethics on the Company’s website at www.ohb.com.my.
Sustainability of Business
The Board is aware of the importance of business sustainability and has embedded its Sustainability Policy in
developing its corporate strategies with the impact on the environmental, social and governance aspects taken
into consideration. As for the Group’s activities on corporate social responsibilities for the year under review,
they are disclosed on pages 53 to 54 of this Annual Report.
Supply of and Access to Information
The Board is supplied with relevant information and reports on financial, operational, corporate, regulatory,
business development and audit matters, by way of Board reports or upon specific requests, for informed
decision making and effective discharge of Board’s responsibilities.
Procedures have been established for timely dissemination of Board and Board Committees papers to all
Directors at least seven (7) days to the Board and Board Committees meetings, to give effect to Board decisions
and to deal with matters arising from such meetings. Senior Management of the Group and external advisors are
invited to attend Board meetings to provide additional insights and professional views, advice and explanations
on specific items on the meeting agenda. Besides direct access to Management, Directors may obtain
independent professional advice at the Company’s expense, if considered necessary, in accordance with
established procedures set out in the Board Charter in furtherance of their duties.
Directors have unrestricted access to the advice and services of the Company Secretaries to enable them to
discharge their duties effectively. The Board is regularly updated and advised by the Company Secretaries who
are qualified, experienced and competent on new statutory and regulatory requirements, and the resultant
implications to the Company and Directors in relation to their duties and responsibilities. The Company
Secretaries, who oversee adherence with Board policies and procedures, brief the Board on the proposed
contents and timing of material announcements to be made to regulators. The Company Secretaries attend all
Board and Board Committees meetings and ensure that meetings are properly convened, and that accurate and
proper records of the proceedings and resolutions passed are taken and maintained accordingly. The removal of
Company Secretaries, if any, is a matter for the Board, as a whole, to decide.
Principle 2 Strengthen Composition of the Board
Board Composition and Balance
At the date of this Statement, the Board consists of ten (10) members, comprising four (4) Executive Directors
and six (6) Non-Executive Directors, three (3) of whom are Independent. This composition fulfils the
requirements as set out under the Listing Requirements of Bursa, which stipulate that at least two (2) Directors
or one-third of the Board, whichever is higher, must be Independent. The profile of each Director is set out on
pages 12 to 18 of this Annual Report.
29
Nominating Committee
The Company has a Nominating Committee, which comprises wholly Non-Executive Directors, with a majority
being Independent. At the date of this Statement, the members are as follows:
Chairman:
YM Tengku Tan Sri Dato’ Seri Ahmad Rithauddeen bin Tengku Ismail – appointed on 28 May 2007
Senior Independent Non-Executive Director
Members:
Sharifah Intan binti S M Aidid – appointed on 28 May 2007
Non Independent Non-Executive Director
Mary Geraldine Phipps – appointed on 29 April 2010
Independent Non-Executive Director
Dato’ Ghazi bin Ishak – appointed on 24 February 2011
The Nominating Committee was formed by the Board with specific terms of reference to recommend to the
Board the candidature of Directors, oversee assessment of Directors, appoint Directors to Board Committees
and review the Board’s succession plans as well as training programmes.
Appointment and Induction
In discharging its responsibilities, the Nominating Committee has developed certain criteria for use in the
recruitment process and annual assessment of Directors. In evaluating the suitability of candidates, the
Nominating Committee considers, inter-alia, the competency, experience, commitment (including time
commitment), contribution and integrity of the candidates, including, where appropriate, the criteria on
assessing the independence of candidates’ appointment as Independent Non-Executive Directors.
Following the appointment of new Directors to the Board, the Committee, along with the Chairman, Group
Managing Directors and other Executive Director ensure that an induction programme is arranged to enable
them to have a full understanding of the nature of the business, current issues within the Group and corporate
strategies as well as the structure and management of the Group.
Annual Assessment and Board Diversity
The Committee reviews annually the required mix of skills and experience of Directors to enhance board
diversity. This is achieved through the use of questionnaire for Directors to assess the effectiveness of the
Board, as a whole, the Committees of the Board and contribution of each individual Director. This process
includes a peer review where Directors assess their own and also their fellow Directors’ performance. The
assessment and comments by all Directors are summarized and reported at a Board Meeting by the Nominating
Committee Chairman for continuous improvements of the Board, Board Committees and Directors.
Since 2009, the Board has already achieved the gender diversity target set by the Government in 2011 to have at
least 30% women representation in the boards of public listed companies by 2016 as three (3) out of ten (10)
Directors are women. Nevertheless, the evaluation of the suitability of candidates is based on the candidates’
competency, character, time commitment, integrity and experience in meeting the needs of the Company.
Re-election and re-appointment of Directors
The Company’s Articles of Association provide that at least one-third of the Board is subject to retirement by
rotation at each Annual General Meeting. The Directors to retire in each year are those who have been longest in
office since their appointment or reappointment. All Directors are required to submit themselves for re-election
at regular intervals and at least every three (3) years.
In addition, Directors over seventy (70) years of age are required to submit themselves for re-appointment
annually in accordance with Section 129(6) of the Companies Act, 1965.
30
During the financial year under review, two (2) Committee meetings were held and attended by all its members.
Annually, the Nominating Committee reviews and assesses the mix of skills, expertise, composition, size and
experience of the Board, including the core-competencies of both Executive and Non-Executive Directors; the
contribution of each individual Director; effectiveness of the Board, as a whole, and the Board Committees and
also the retirement of Directors by rotation who are eligible for re-election.
Remuneration Committee – Directors’ Remuneration
The Remuneration Committee, established by the Board, is responsible for setting the policy framework and
recommending to the Board the remuneration of Directors so as to ensure that the Company is able to attract and
retain its Directors needed to run the Group successfully. The components of Directors’ remuneration are
structured so as to link rewards to financial performance of the Group in the case of Executive Directors. In the
case of Non-Executive Directors, the level of remuneration reflects the experience and level of responsibilities
undertaken by the individual Non-Executive Director concerned.
The Remuneration Committee comprises wholly Non-Executive Directors, with a majority being Independent.
At the date of this Statement, the members are as follows:
Chairman:
YM Tengku Tan Sri Dato’ Seri Ahmad Rithauddeen bin Tengku Ismail – appointed on 29 April 2009
Senior Independent Non-Executive Director
Members:
Dato’ Dr Tan Chong Siang – appointed on 29 April 2009
Non-Independent Non-Executive Director
Sharifah Intan binti S M Aidid – appointed on 29 April 2009
Mary Geraldine Phipps – appointed on 19 November 2009
Dato’ Ghazi bin Ishak – appointed on 28 February 2013
The Remuneration Committee is entrusted to recommend to the Board, the remuneration of Executive Directors
in all its forms to ensure the rewards are linked to their performance and contributions to the Group’s growth
and profitability in order to align the interest of the Directors with those of shareholders. The Committee also
ensures the levels of remuneration for Executive Directors are linked to their extent of responsibilities
undertaken and contribution to the effective functioning of the Board. None of the Executive Directors
participated in any way in determining their individual remuneration.
The Board, as a whole, approves the remuneration of Non-Executive Directors with the Directors concerned
abstaining from the decision in respect of their individual remuneration and recommends Directors’ fees to be
approved at the forthcoming annual general meeting in line with the Company’s Articles of Association.
During the financial year under review, the Remuneration Committee reviewed and recommended to the Board,
the remuneration for all Executive Directors of the Company while the Non-Executive Directors’ fees are
recommended by the Board for shareholders’ approval at the Company’s Annual General Meeting.
Details of remuneration of Directors of the Company for the financial year ended 31 December 2012 are as
follows:
Executive
Non-Executive
Total
RM’000
RM’000
RM’000
702
471
1,173
Salaries
2,619
-
2,619
Other emoluments
7,154
772
7,926
10,475
1,243
11,718
Directors’ Fees
Total
31
The number of Directors of the Company in each remuneration band is as follows:
Number of directors
Executive
Non-Executive
RM 0 – RM 50,000
-
2
RM 50,001 – RM 100,000
-
5
RM 100,001 – RM 150,000
-
1
RM 650,001 – RM 700,000
-
1
RM 1,400,001 – RM 1,450,000
1
-
RM 2,800,001 – RM 2,850,000
1
-
RM 3,050,001 – RM 3,100,000
1
-
RM 3,150,001 – RM 3,200,000
1
-
Total
4
9
Principle 3 Reinforce Independence of the Board
Directors’ Independence
There is a clear division of responsibilities amongst the Executive Chairman, Group Managing Directors and
Executive Director to embed accountability and facilitate the division of responsibility, such that no one
individual has unfettered powers over decision making. The Chairman is responsible for ensuring the adequacy
and effectiveness of the Board’s governance process and acts as a facilitator at Board meetings to ensure that
contributions by Directors are forthcoming on matters being deliberated and that no Board member dominates
discussion. All Executive Directors, supported by the Management team, implement the Group’s strategic plan,
policies and decisions adopted by the Board, and oversee the operations and business development of the Group.
The Board recognises the importance of independence and objectivity in the decision making process. Executive
Directors are responsible for the management of day-to-day business operations in the respective divisions as
well as the implementation of policies and decisions approved by the Board, whilst the Executive Committee, as
a whole, sets the strategic direction for the Group.
Recommendation 5.3 of the MCCG 2012 provides that the Board must comprise a majority of Independent
Directors where the Chairman of the Board is not an Independent Director. The existing composition of the
Board is such that Independent Directors do not form a majority. The Board believes that the interests of
shareholders are best served by a Chairman who is sanctioned by shareholders and who acts in the best interests
of shareholders as a whole. As the Chairman has a significant relevant interest in the Group, she is well placed
to act on behalf of shareholders and in their best interests. The Board also believes that the current Directors has
a balanced mix of skills, experience, expertise and competency to bring the Group forward while discussions are
always carried out with candour and vigour, allowing all Directors to express their opinions regardless of their
position. Moreover, the Directors are professionals in their own rights and are recognisable public figures who
exercise objectivity in making decisions for the benefit of the Group.
The Independent Non-Executive Directors bring to bear objective and independent views, advice and judgment
on interests, not only of the Group, but also of shareholders, employees, customers, suppliers and the many
communities in which the Group conducts its business. Independent Non-Executive Directors are essential for
protecting the interests of shareholders and can make significant contributions to the Company’s decision
making by bringing in the quality of detached impartiality. To fulfil this purpose, YM Tengku Tan Sri Dato’
Seri Ahmad Rithauddeen bin Tengku Ismail has been identified as the Company’s Senior Independent NonExecutive Director, to whom concerns may be conveyed by shareholders and other stakeholders.
32
In early 2013, the Board assessed the independence of its Independent Non-Executive Directors based on
criteria set out under the Listing Requirements of Bursa Malaysia and adopted by the Nominating Committee.
The Board Charter was revised to restrict the tenure of an Independent Director to a cumulative term of nine (9)
years. However, an Independent Director may continue to serve the Board upon reaching the 9-year limit
subject to the Independent Director’s re-designation as a Non-Independent Non-Executive Director. In the
event the Board intends to retain the Director as Independent after the latter has served a cumulative term of
nine (9) years, the Board shall justify the decision and seek shareholders’ approval at general meeting. In
justifying the decision, the Nominating Committee is entrusted to assess the candidate’s suitability to continue
as an Independent Non-Executive Director based on the criteria on independence.
Following the assessment and deliberations by the Nominating Committee and the Board, as a whole, the Board
has decided to recommend YM Tengku Tan Sri Dato’ Seri Ahmad Rithauddeen bin Tengku Ismail to continue
to act as Independent Non-Executive Director, subject to shareholders’ approval at the forthcoming Annual
General Meeting of the Company although his tenure has exceeded nine (9) years since being appointed on 9
February 2000. Key justifications for his recommended continuance as an Independent Non-Executive Director
are as follows:

he fulfils the criteria under the definition on Independent Director as stated in the Main Market Listing
Requirements of Bursa Malaysia and, therefore, is able to bring independent and objective judgment to the
Board;

his service in the public sector enables him to share his valuable experience, skills and expertise with the
Board and Board Committees;

he has been with the Company long and therefore understands the Company’s business operations which
enables him to contribute actively and effectively during deliberations or discussions at Board and Board
Committees meetings;

he has contributed sufficient time and efforts in attending the Board and Board Committee meetings;

he has actively participated in Board deliberations, provided objectivity in decision making and an
independent voice to the Board; and

he has exercised due care during his tenure as Independent Non-Executive Director of the Company and
carried out his professional duties in the best interest of the Company and shareholders.
Principle 4 Foster commitment of Directors
Board and Board Committees Attendance
The Board ordinarily meets at least four (4) times a year, scheduled well in advance before the end of the
preceding financial year to facilitate the Directors in planning their meeting schedule for the year. Additional
meetings are convened when urgent and important decisions need to be made between scheduled meetings.
Board and Board Committee papers are prepared by Management which provides the relevant facts and analysis
for the convenience of Directors. The agenda, the relevant reports and Board papers are furnished to Directors
and Board Committee members in advance to allow the Directors sufficient time to peruse for effective
discussion and decision making during meetings. At the quarterly Board meetings, the Board reviews the
business performance of the Group and discusses major operational and financial issues. The Chairman of each
Board Committee informs the Directors at each Board meetings of any salient matters noted during the
respective Committee’s meetings which require the Board’s notice or direction. All pertinent issues discussed at
Board meetings in arriving at the decisions and conclusions are properly recorded by the Company Secretaries
by way of minutes of meetings.
33
During the financial year under review, the Board met on seven (7) occasions. Details of Directors’ attendance
for Board and Board Committee meetings are as follows:
BOD Board of Directors
EXCO Executive Committee
AC
Audit Committee
Directors
NC
RC
RMC
Nominating Committee
Remuneration Committee
Risk Management Committee
BOD
EXCO
Executive Chairman
7/7
6/6
Group Managing Director
7/7
6/6
3/3
7/7
6/6
3/3
Non-Independent
Non-Executive Director
7/7
6/6
6/7
5/6
Executive Director
AC
NC
RC
RMC
1/1
Sharifah Intan binti S.M. Aidid
Non-Independent Non-Executive
Director
7/7
5/5
2/2
1/1
Rithauddeen bin Tengku Ismail
Senior Independent Non-Executive
Director
5/7
3/5
2/2
0/1
6/7
5/5
2/2
1/1
Dato’ Ghazi bin Ishak
4/7
4/5
2/2
Satoshi Okada
Non-Independent Non-Executive
Director
5/7
3/3
It is the policy of the Company for Directors to devote sufficient time and efforts to carry out their
responsibilities. The Board obtains this commitment from Directors at the time of appointment. It is also the
Board’s policy for Directors to notify the Chairman before accepting any new directorships notwithstanding that
the Listing Requirements allow a Director to sit on the boards of not more than five (5) listed issuers. Such
notification is expected to include an indication of time that will be spent on the new appointment.
34
Directors’ Training
The Board, via the Nominating Committee, continues to identify appropriate briefings, seminars, conferences
and courses to be attended by Board members to keep abreast of changes in legislations and regulations
affecting the Group.
All Directors, including Alternate Directors, have completed the Mandatory Accreditation Programme. During
the financial year under review, all Directors attended development and training programmes as well as
conferences in areas of finance, tax, corporate governance, leadership, legal, business intelligence, industry and
regulatory developments.
The programmes attended by the Directors during the financial year ended 31 December 2012 include the
following:
Directors
Details of Programme
Executive Chairman
 IFRS Convergence Awareness Talk
 Amendments to the Listing Requirements of Bursa Malaysia Berhad
and Corporate Governance Blueprint 2011
 Briefing on The Competition Act 2010
 Briefing on the Malaysian Code of Corporate Governance 2012
 The Malaysian Code of Corporate Governance 2012 and the
Implication and Challenges to Public Listed Companies
 Director and Senior Executives Compensation Seminar
 Advocacy Sessions on Disclosure for CEOs and CFOs
 Compliance: Are you Meeting the Requirements? Directors' &
Officers' Guide on Liability, Duties & Obligations and
 CPA Congress in Kuala Lumpur
Non-Independent
Executive Director
Non-Independent
 National Procurement Forum for the Public and Private Sector 2012
35
Directors
Details of Programme
YM Tengku Tan Sri Dato’ Seri
Ahmad Rithauddeen bin Tengku
Ismail
Senior Independent
Independent Non-Executive
Director
 Malaysian Code of Corporate Governance 2012 & Malaysian
Recognition and Management Risk
 MIA Conference 2012
Dato’ Ghazi bin Ishak
Independent Non-Executive
Director
Satoshi Okada
Non-Independent
Datin Loh Ean
Alternate Director to
Dato’ Seri Tan Hui Jing
Tan Kheng Hwee
 Seeking Preservation and Profit in Uncertain Times
 Compliance: Are you Meeting the Requirements? Directors' &
Officers' Guide on Liability, Duties & Obligations
In addition, the Company Secretaries circulate the relevant guidelines on statutory and regulatory requirements
from time to time for the Board’s reference and brief the Board on these updates at Board meetings. The
External Auditors also briefed the Board members on any changes to the Malaysian Financial Reporting
Standards that affect the Group’s financial statements during the year.
Principle 5 Uphold integrity in financial reporting by the Company
Compliance with financial reporting standards
The Board is responsible for ensuring that the financial statements give a true and fair view of the state of affairs
of the Group and of the Company as at the end of the financial year. This includes the results and cash flows of
the Group and Company for the year then ended. The Board has established an Audit Committee, comprising
exclusively Non-Executive Directors, majority of whom are Independent, to ensure that the financial statements
of the Group and Company comply with applicable approved Financial Reporting Standards issued by the
Malaysian Accounting Standards Board and the provisions of the Companies Act, 1965. The composition of the
Committee, including its roles and responsibilities, is set out on pages 42 to 48 of this Annual Report.
36
Relationship with external auditors
The Board upholds the integrity of financial reporting by the Company. In assessing the suitability and
independence of the external auditors, the Board, via the Audit Committee, has, in early 2013, formalised policy
and procedures on the types of non-audit services that may be provided by the external auditors, including the
thresholds and procedures that need to be observed should the external auditors be contracted to provide the
non-audit services.
Principle 6 Recognise and manage risks
Risk Management
Recognising the importance of risk management, the Board has in past years formalised a structured Enterprise
Risk Management framework to identify, evaluate, control, monitor and report the principal business risks faced
by the Group on an ongoing basis.
The Company has established a Risk Management Committee to review and recommend the risk management
policies and strategies for the Group as well as assisting the Board to fulfil its risk management and statutory
responsibilities in order to manage the overall risk exposure of the Group. At the date of this Statement, the
members of the Committee are as follows:
Chairman:
Mary Geraldine Phipps – appointed on 30 November 2010
Members:
Dato’ Robert Wong Lum Kong – appointed on 20 May 2002
Dato’ Seri Lim Su Tong – appointed on 20 May 2002
Tan Kheng Hwee – appointed on 20 May 2002
Alternate Director to Dato’ Seri Loh Cheng Yean
Wong Tet Look – appointed on 20 May 2002
Group Chief Financial Officer
The key features of the Enterprise Risk Management framework, including the internal control system to
address risk identified are set out in the Internal Control Statement of the Group set out on pages 49 to 52 of this
Annual Report.
Internal Audit
In line with the MCCG 2012 and the Listing Requirements of Bursa, the Board has established an independent
internal audit function that reports directly to the Audit Committee. Details of the work conducted by the
internal audit function are disclosed in the Internal Control Statement and Audit Committee Report set out on
pages 49 to 52 and pages 42 to 44 respectively of this Annual Report.
Principle 7 Ensure timely and high quality disclosure
Corporate Disclosure
The Board is aware of the need to establish corporate disclosure policies and procedures to enable
comprehensive, accurate and timely disclosures relating to the Company and its subsidiaries to the regulators,
shareholders and stakeholders. In early 2013, the Board has formalised pertinent corporate disclosure policies
not only to comply with the disclosure requirements as stipulated in the Listing Requirements of Bursa, but also
setting out the persons authorised and responsible to approve and disclose material information to shareholders
and stakeholders.
37
To augment the process of disclosure, the Board has established a dedicated section for corporate governance
under the Investor Relations heading on the Company’s website.
Principle 8 Strengthen relationship between company and shareholders
Shareholder participation at general meeting
The Annual General Meeting (“AGM”), which is the principal forum for shareholder dialogue, allows
shareholders to review the Group’s performance via the Company’s Annual Report and pose questions to the
Board for clarification. At the AGM, shareholders participate in deliberating on resolutions being proposed or
on the Group’s operations in general. During the last AGM, a question & answer session was held where the
Chairman invited shareholders to raise questions with responses from the Board.
The Notice of AGM is circulated at least twenty one (21) days before the date of the meeting to enable
shareholders to go through the Annual Report and papers supporting the resolutions proposed. Shareholders are
invited to ask questions both about the resolutions being proposed before putting a resolution to vote as well as
matters relating to the Group’s operations in general. All the resolutions set out in the Notice of the 50 th AGM
were put to vote by show of hands and duly passed. The outcome of the AGM was announced to Bursa on the
same meeting day. Going forward, the Board will consider poll voting for substantive resolutions, being
resolutions for which circulars have been issued to shareholders.
During the last AGM, the Executive Chairman provided shareholders with a brief review of the Group’s
operations for the financial year while the Group Chief Financial Officer also shared with shareholders at the
meeting responses to questions submitted in advance by the Minority Shareholder Watchdog Group.
Effective communication with shareholders
The Company recognises the importance of being transparent and accountable to its investors and, as such, has
maintained an active and constructive communication policy that enables the Board and Management to
communicate effectively with investors, financial community and the public generally. The various channels of
communications are through the quarterly announcements on financial results to Bursa, relevant announcements
and circulars, Annual General Meeting and through the Group’s website at www.ohb.com.my where
shareholders can access corporate information, annual reports and company announcements.
However, any information that may be regarded as undisclosed material information about the Group will not be
given to any single shareholder or shareholder group.
Investor relations
The Board has formalised its policy on communication with shareholders in early 2013 to enable the Company
to communicate effectively with its shareholders, prospective investors, stakeholders and public generally with
the intention of giving them a clear picture of the Group's performance and operations. To maintain transparency
and to effectively address any issues and concerns, the Company has a dedicated an electronic mail, i.e.
corporate@ohb.com.my to which stakeholders can direct their queries.
This Statement is issued in accordance with a resolution of the Board dated 23 April 2013.
38
Other Information and Disclosure
I.
Non-audit fees
Non-audit fees amounting to RM 287,000 for the Group and RM 135,000 for the Company were paid to the
external auditors of the Company for the financial year ended 31 December 2012.
II. Loan Contracts Involving Interest of Related Party
(a) Loan contract of USD 21 million dated June 30, 2011 between the Company (“OHB”) and Oriental Boon
Siew (Mauritius) Pte. Ltd. (“OBSM”);
(b) Loan contract of USD 5 million dated September 30, 2011 between OBS (Singapore) Pte. Ltd. (“OBSG”)
and PT Bumi Sawit Sukses Pratama ("BSSP”);
Purpose
Interest rate
Term as to payment of
interest
Repayment of principal
Security
Loan From OHB to OBSM
For its day to day operations.
USD Libor + Spread of 0.5% per annum
Payable at end of tenor (1,2 or 3 months) or quarterly (tenor more than 3 months)
whichever is applicable
On demand
Unsecured
Purpose
Interest rate
Term as to payment of
interest
Repayment of principal
Security
Loan From OBSG to BSSP
To reduce their revolving credit loans as well as for its day to day operations.
USD Libor + Spread of 1.0% per annum
Payable at end of tenor (1,2 or 3 months) or quarterly (tenor more than 3 months)
whichever is applicable
On demand
Unsecured
III. American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”)
The Company did not sponsor any ADR or GDR programme during the financial year 2012.
IV. Sanctions and /or Penalties Imposed
There was no material sanctions and/or penalties imposed by the relevant regulatory bodies on OHB or its
subsidiary, directors or management during the financial year 2012.
V. Variation in Results
There was no material variation between the audited results for the financial year ended 31 December 2012 and
the unaudited results previously released for the financial quarter ended 31 December 2012.
VI. Profit Guarantee
There were no profit guarantees given by the Company during the financial year 2012.
VII. Material Contracts
There were no material contracts entered into by the Company and its subsidiary companies, involving Directors
and substantial shareholders during the financial year.
39
VIII. Recurrent Related Party Transactions
At the Annual General Meeting held on 28 June 2012, the Company obtained a shareholders’ Mandate to allow
the Group to enter into recurrent related party transactions of a revenue or trading nature.
In accordance with Section 3.1.5 of Practice Note 12 of the Bursa Malaysia Securities Berhad Listing
Requirements, the details of recurrent related party transactions conducted during the financial year ended 31
December 2012 pursuant to the Shareholders’ Mandate are disclosed as follows:a) Transactions between OHB Group and Boon Siew Sdn Bhd Group which involve the interests of major
stockholder of OHB, Boon Siew Sdn Bhd and its Group
Plastic parts for batteries
Provision of leasing line and hire purchase facilities on motor vehicles, machinery
and office equipment
Building management charges
Spare parts and raw material
Spare parts and raw material and car services
Transport charges & truck rental
Quarry products
Office rental
Store rental
Land rental
Plant rental
Rental of premises
Provision of sales, corporate advertising and marketing of hotel
Management fee
Car services
Building materials
Mixed concrete and quarry products
Car services
Building materials
Building materials
Mix concrete
Cement bricks
RM’ 000
1,002
514
15
187
278
91
592
603
24
63
35
72
1,370
8,899
20
179
139
2
563
883
276
90
b) Transactions between OHB Group and Dato’ Syed Mohamad Bin Syed Murtaza and family and their
interests
Motorcycle spokes, nipples, control cables and motorcycle parts
c)
RM’ 000
7,702
Transactions between OHB Group and Honda Motor Co. Ltd. Group which involve the interests of a
director/major shareholder of OHB subsidiaries, Dato’ Syed Mohamad Bin Syed Murtaza and family and a
major shareholder of OHB subsidiaries, Honda Motor Co. Ltd.
RM’ 000
240
180
Factory rental
Spoke semi product
40
d) Transactions between OHB Group and Honda Motor Co. Ltd. Group which involve the interests of a direct
shareholders of OHB subsidiary or associated companies, Honda Motor Co. Ltd and its related company
Shock absorbers for motor vehicles, automotive control cables & power window regulator
New vehicles, spare parts and accessories for motor vehicles
Painting, spraying charges, motor vehicles parts, rework charges
Motorcycle spokes, nipples, control cables, shock absorbers, raw materials and motorcycle
parts
e)
Transactions between OHB Group and Karli Boenjamin and his interest
RM’ 000
6,901
3,967
Fresh fruit bunches
Contractor for land clearing
f)
RM’ 000
27,608
26,019
40
226,661
Transactions between OHB Group and Ooi Soo Pheng and Tan Liang Chye and their interests
RM’ 000
407
28
256
Subcontract transportation
Caterpillar & pick up rental
Mixed concrete and quarry product
g) Transactions between OHB Group and Tan Liang Chye and his interest
RM’ 000
5,884
Cements
h) Transactions between OHB Group and Datuk Loh Kian Chong and his interests
RM’ 000
1,662
Building materials
41
Audit Committee Report
Membership
The present members of the Audit Committee (the “Committee”) comprise:
Name of member
Position
Chairman,
Rithauddeen bin Tengku Ismail
Terms of reference
The Committee was established to act as a Committee of the Board of Directors, with terms of reference as set
out on pages 45 to 48 of this Annual Report.
Meetings
The Committee convened five (5) meetings during the financial year. Details of the attendance of members are
as follows:
Name of member
Attendance
5/5
5/5
YM Tengku Tan Sri Dato’ Seri Ahmad Rithauddeen bin Tengku Ismail
3/5
4/5
The meetings were appropriately structured through the use of agendas, which were distributed to members with
sufficient notification.
The Company Secretary was present by invitation at all meetings. Representatives of the external auditors and
the head of Internal Audit also attended the meetings upon invitation.
Training and continuous engagement
Members of the Committee have attended relevant training seminars and programme to enhance their
competency in fulfilling their functions and duties more effectively. The details of training attended by each
member are set out on pages 35 to 36 of this Annual Report.
During the financial year, the Committee Chairman engaged with Senior Management, Internal and External
Auditors by way of telephone conversations and attending ad-hoc meetings, in order to be kept informed of
matters affecting the Group. Through such engagements, relevant issues were brought to the attention of the
Committee in a timely manner.
42
Summary of activities during the financial year
The Committee carried out its duties in accordance with its term of reference during the financial year and
revised its terms in early 2013 to adopt the Principles and Recommendations promulgated by the Malaysian
Code on Corporate Governance 2012. The main activities undertaken by the Committee were as follows:

Reviewed the external auditors’ scope of work and audit plan for the year. Prior to the audit, representatives
of the external auditors presented their audit strategy and plan;

Reviewed with the external auditors the results of the audit, the audit report and the management letter;

Met with the external auditors twice (2) during the financial year without the presence of any Executive
Board members and Senior Management, to discuss problems and reservations arising from the interim and
final audits, if any, or any other matter the external auditors may wish to discuss;

Considered and recommended to the Board on the re-appointment of the external auditors and the audit fees
payable to the external auditors for the Board’s submission to shareholders for approval at the Annual
General Meeting;

Reviewed the Internal Audit Department’s audit plan for the financial year under review to ensure adequate
scope and comprehensive coverage of the activities of the Group;

Reviewed the effectiveness of the audit process, resource requirements for the year and assessed the
performance of Internal Audit Department;

Reviewed the internal audit reports, which highlighted the audit issues and Management’s response. Where
appropriate, the Committee has directed Management to present its status report on the management action
plans to the Committee directly;

Reviewed the audited financial statements of the Group and of the Company, before submission to the
Board for its consideration and approval. The review was to ensure that the audited financial statements
were drawn up in accordance with the provisions of the Companies’ Act, 1965 and the applicable approved
accounting standards adopted by the Malaysian Accounting Standards Board;

Reviewed the Company’s compliance, in particular the quarterly and year-end financial statements, with the
Listing Requirements of Bursa Malaysia Securities Berhad and other relevant legal and regulatory
requirements;

Reviewed pertinent issues of the Group which had a significant impact on the results of the Group;

Reviewed the quarterly unaudited financial results and announcements before recommending them for the
Board’s approval; and

Reviewed the recurrent related party transaction of revenue and trading nature and other related party
transactions entered into by the Group.
43
Internal audit function
The Group has an internal audit function that is independent of the activities and operations it audits. The head
of internal audit reports directly to the Audit Committee who reviews and approves the internal audit
department’s annual audit plan, financial budget and human resource requirements to ensure that the department
is adequately resourced with competent and proficient internal auditors. The principal role of the internal audit is
to undertake independent, regular and systematic reviews of the systems of internal control in order to provide
reasonable assurance that such systems continue to operate satisfactorily and effectively. It is the responsibility
of the internal audit function to provide the Audit Committee with independent and objective reports on the state
of internal control of the various operating units within the Group and the extent of compliance of the units with
the Group’s established policies and procedures as well as relevant statutory requirements.
The total costs incurred for the internal audit function of the Company and the Group for 2012 are as follow:
RM’000
653
709
Company
Group
Further details of the activities of the internal audit function are set out in the Internal Control Statement on
pages 49 to 52 of this Annual Report.
44
Term of Reference of the Audit Committee
Objectives
The primary function of the Audit Committee is to assist the Board of Directors in fulfilling the following
oversight objectives on the Group activities:

assess the Group’s processes relating to its risks and control environment;

oversee financial reporting;

evaluate the internal and external audit processes, including issues relating to the system of internal control,
risk management and governance within the Group; and

investigate any concerns received on possible improprieties within the Group.
Composition
The Board shall elect and appoint Committee members from amongst its numbers, comprising no fewer than
three (3) Directors, all of whom shall be Non-Executive Directors, with a majority of them being Independent
Directors of the Company. No alternate director shall be appointed a member of the Audit Committee. The
Chairman of the Committee shall be an Independent Non-Executive Director.
The Board shall at all times ensure that at least one (1) member of the Committee shall be:

A member of the Malaysian Institute of Accountants (“MIA”); or

If he/she is not a member of MIA, he/ she must have at least three (3) years of working experience and:

-
he or she must have passed the examinations specified in Part I of the 1 st Schedule of the Accountants
Act 1967; or
-
he or she must be a member of the associations of accountants specified in Part II of the Accountants
Act 1967; and
Fulfils such other requirements as prescribed or approved by the Bursa Malaysia.
If a member of the Committee resigns, passes away or for any reason ceases to be a member with the result that
the number of members is reduced to below three (3), the Board shall within three (3) months of the event
appoint such number of new members as may required to fill the vacancy.
The Board shall review the terms of each of its members at least once (1) every three (3) years.
Quorum and Meeting Procedures
Meetings shall be conducted at least four (4) times annually, or more frequently as circumstances dictate. In
addition to the regular scheduled meeting, the Chairman shall call a meeting of the Committee if so requested by
any member of the Committee or by the Chairman of the Board.
The Chairman of the Committee shall engage with Senior Management, such as the Executive Directors, Chief
Financial Officer, the Head of Internal Audit and the External Auditors in order to be kept informed of matters
affecting the Group in a timely manner.
In order to form a quorum (subject to a minimum number of two (2) members) for the meeting, the majority of
the members present must be Independent Non-Executive Directors. In the absence of the Chairman, the
members present shall elect a Chairman for the meeting from amongst the members present.
45
The Company Secretaries shall be appointed Secretaries of the Committee (the “Secretaries”). The Company
Secretaries, in conjunction with the Chairman, shall draw up an agenda, which shall be circulated together with
the relevant support papers, at least seven (7) days prior to each meeting to the members of the Committee. The
minutes shall be circulated to members of the Board. The Committee shall regulate the manner of proceeding of
its meetings, having regard to normal conventions on such matter.
Authority
The Committee is authorised to investigate any matter within its terms of reference and all employees are
directed to cooperate with any request made by the Committee.
The Committee shall have full and unlimited access to any information pertaining to the Group.
The Committee shall have the necessary resources, including the procurement of independent professional or
other advice which are required to perform its duties.
The Committee shall have direct communication channels, and shall be able to convene meetings during the
financial year with the External Auditors, the Internal Auditors or both, excluding the attendance of other
directors and employees of the Group, whenever deemed necessary.
Where the Committee is of the view that a matter reported by it to the Board has not been satisfactorily resolved
resulting in breach of the Bursa Malaysia Listing Requirements, the Committee shall promptly report such
matter to Bursa Malaysia.
Attendance
The Committee may, as and when deemed necessary, invite other Board members and Management to attend
the meetings.
Duties and Responsibilities
In fulfilling its primary objectives in accordance with Paragraph 15.12 of the Listing Requirements, the
Committee shall undertake the following responsibilities and duties:
A. Internal Audit

Review the adequacy of the internal audit scope and plan, functions, competency and resources of the
internal audit function and that it has the necessary authority to carry out its work;

Ensure Internal Auditors carry out their work according to the standards set by recognised professional
bodies (e.g Malaysian Institute of Accountants, Institute of Internal Auditors);

Review the internal audit programmes, processes, and reports to evaluate the findings of internal audit
and to ensure that appropriate and prompt remedial action is taken by Management on the
recommendations of the Internal Audit function;

Review the performance of Internal Auditors, who will report functionally to the Committee, on an
annual basis. Approve any appointment or termination of senior members of the Internal Audit function
and take cognisance of resignations and providing the resigning members an opportunity to submit
reasons for resigning;

Review the Internal Audit Charter, budget and staffing of the internal audit department;

Review the adequacy and effectiveness of internal control system, including management information
system and the Internal Auditors’ and/or External Auditors’ evaluation of the said systems.
46
B.
External Audit

Recommend the nomination of a person or persons as External Auditors;

Review the appointment and performance of External Auditors, the audit fee and any question of
resignation or dismissal before making recommendations to the Board;

Review with the External Auditors, the audit scope and plan, including any changes to the planned
scope of the audit plan;

Review the independence, suitability and objectivity of the External Auditors and their services,
including professional fees, so as to ensure a proper balance between objectivity and value for money;

Review the non-audit services provided to the Company for the financial year, including the nature of
the non-audit services, fee levels of the non-audit services - individually and in aggregate relative to the
external audit fees and safeguards deployed to eliminate or reduce the threat to objectivity and
independence in the conduct of the external audit resulting from the non-audit services provided;

Develop and review for recommendation to the Board, the Company’s policy in relation to the
provision of non-audit services by the External Auditors, which amongst others, takes into
consideration:
-
whether the skills and experience of the audit firm makes it a suitable service provider for nonaudit services;
-
whether there are safeguards in place to eliminate or reduce to an acceptable level any threat to
objectivity or independence in the conduct of the audit resulting from non-audit services provided
by the External Auditors; and
-
the nature of the non-audit services, the related fee levels and the feel levels individually and in
aggregate relative to the external audit fees of the Company.
C. Audit Reports

Review the external and internal audit reports to ensure that appropriate and prompt remedial action is
taken by Management on major deficiencies in controls or procedures that have been identified;

Review major audit findings and Management’s response during the financial year with Management,
External Auditors and Internal Auditors, including the status of previous audit recommendations.
D. Financial Reporting

Review the quarterly results and the year-end financial statements, prior to the approval by the Board
focusing particularly on:
-
Changes in implementation of major accounting policy;
-
Significant or unusual events; and
-
Compliance with applicable financial reporting and accounting standards as well as other legal
requirements.
47
E. Related Party Transactions

Review any related party transaction and conflict of interest situation that may arise within the
Company or the Group, including any transaction, procedure or course of conduct that raises question
on management integrity.
F. Other Matters Delegated by the Board

Review the assistance given by the Group’s officers to the auditors, and any difficulties encountered in
the course of audit work, including any restrictions on the scope of activities or access to required
information;

Direct and, where appropriate, supervise any special projects or investigations considered necessary,
and review investigation reports on any major defalcations, frauds and thefts;

Review procedures in place to ensure that the Group is in compliance with the Companies Act 1965,
Bursa Malaysia Listing Requirements and other legislative and reporting requirements;

Prepare reports, if the circumstances arise or at least once (1) a year, to the Board summarising the
work performed in fulfilling the Committee’s primary responsibilities; and

Any other activities, as authorised by the Board.
Reporting
Upon the conclusion of each meeting, the Chairman shall report to the Board of Directors the activities that it
had undertaken and the key recommendations for the Board’s consideration and decision. Thereafter, the
implementation status or progress of key recommendations from previous internal audits shall also be reported
to the Board.
Committee Ethics and Procedures
All members shall safeguard internal committee communications and treat them as strictly private and
confidential, and for the use of Committee members only, except for meeting minutes which shall be circulated
to members of the Board.
The Committee may be required to check references and consult selected third party sources on a confidential
basis before making its final recommendations. The Committee shall work diligently in performing its duties
and responsibilities while adhering to the Directors’ and Company’s Code of Ethics.
Review of the Terms of Reference
The terms of reference shall be reviewed by the Committee as and when required. All amendments to the terms
of reference must be approved by the Board.
48
Statement on Internal Control
Introduction
The Board is committed to maintaining a sound system of risk management and internal control in the Group
and is pleased to provide the following Internal Control Statement (“Statement”), which outlines the nature and
scope of risk management and internal control of the Group. The Statement also takes into consideration the
Statement on risk management and internal control: Guidelines for Directors of Listed Issuers, a publication
issued by Bursa Malaysia Securities Berhad (“Bursa Securities”) on the issuance of Internal Control Statement
pursuant to Paragraph 15.26(b) of the Listing Requirements of Bursa Securities.
Board’s Responsibility
The Board is ultimately responsible for the Group’s system of risk management and internal control (the
“system”), which includes the establishment of an appropriate control environment and framework as well as
reviewing its adequacy and effectiveness to safeguard shareholders’ investment and the Group’s assets. In view
of the limitations inherent in any system of risk management and internal control, the system is designed to
manage, rather than to eliminate, the risk of failure to achieve the Group’s business and corporate objectives.
Accordingly, the system can only provide reasonable, but not absolute assurance against material misstatement
or loss.
The Board affirms that there is an on-going process for identifying, evaluating and managing the significant
risks faced by the Group. The Board, through its Audit Committee and Risk Management Committee, regularly
reviews the results of this process, including risk mitigating measures taken by Management to address key risks
identified. The Board confirms that this process has been in place for the financial year under review and up to
the date of approval of this Statement for inclusion in the Annual Report of the Company.
The Audit Committee and Risk Management Committee assist the Board to review the adequacy and
effectiveness of the Group’s risk management and internal control system to ensure that appropriate measures
are carried out by Management to obtain the level of assurance required by the Board. For the purpose of this
Statement, the associated companies in the Group are excluded.
Risk Management
In accordance with Recommendation 6.1 of the Malaysian Code on Corporate Governance (“MCCG 2012”), the
Board has, through its Risk Management Committee (“RMC”), established a risk management and control
framework implemented throughout the Group, which is firmly embedded in the Group’s key processes.
Management is responsible for identifying, evaluating, monitoring and reporting of risks and internal control as
well as providing assurance to the Board that it has done so in accordance with the policies adopted by the
Board. Further independent assurance is provided by the independent Internal Audit function, which operates
across the Group.
The Board believes that the following key elements of the Group’s risk management framework are integral to
maintaining a sound risk management and internal control system:

establishment of the Risk Management Committee with the responsibility of identifying and
communicating to the Board the key risks (present and potential) faced by the Group, their changes and
management action plans to manage the risks;

formalisation of Enterprise Risk Management (“ERM”) Policy and Procedures, which outline the risk
management framework for the Group and offer practical guidance to all employees on risk management
issues;

identification of principal risks (present and potential) faced by operating units in the Group and
Management’s deployment of internal controls to mitigate or manage these risks.
49

articulation of the Group’s risk appetite and parameters (qualitative and quantitative) for the Group and
individual business units so as to gauge acceptability of risk exposure; and

the appointment of a dedicated Risk Officer to coordinate the ERM activities within the Group, to supervise
the ERM policy implementation and documentation at Group level and to act as the central contact and
guide for ERM issues within the Group.
Summary of risk management activities during the financial year
The Risk Management Committee carried out its duties in accordance with its term of reference during the
financial year. Highlights of the activities undertaken by the Committee are as follows:

the Risk Management Committee, with the assistance from a firm of independent consultants and
Management, continues to drive the risk management activities across all business segments of the Group to
sensitise employees within the Group to risk identification, evaluation, control, monitoring and reporting;

representatives for each company within the Group’s business segments, i.e. Automotive and related
products, Hotel and resorts, Plantation, Plastic products, Investment holding and financial services,
Healthcare as well as others, including property development and related products, assess existing as well
as emerging risks and compile the Company’s top risks in risk registers for submission to their segment’s
risk coordinator for review;

risk coordinators, in turn, identify key risks faced by their business segments, the potential impact and
likelihood of those risks occurring, the control effectiveness and the action plans being taken to manage
those risks to the desired level;

on the basis of significance of evaluated risks to the segment’s results, the top five (5) principal risks for
each business segment are reported to the Risk Management Committee. Nonetheless, Management of each
company in the Group continues to monitor and manage all risks at company level, as appropriate;

the Group’s Automotive and Hotels and resorts divisions were selected for further review during the
financial year, following similar review on the Plantation and Healthcare divisions in 2011. Risk assessment
sessions involving Senior Management from these segments were carried out and facilitated by the Group’s
Corporate Finance personnel and the appointed consultants. The outcome, comprising the segments’
principal risks and related mitigating controls were presented to the Risk Management Committee on 26
February 2013. The main objective of such yearly focus on selective business segments is to engender
continuous and proactive risk management activities within the Group;

compilation of a Group risk profile, considering the materiality of the business segment in relation to the
Group risk parameters, with the top risks from each business segment selected by Senior Management and
feedback from Executive Directors on strategic risks was carried out with assistance from a firm of
consultants and presented to the Risk Management Committee for deliberation and approval; and

the risk mitigating measures taken and/or to be taken by Management are reported and reviewed at the Risk
Management Committee meetings. For each of the risks identified, the divisional head is assigned to ensure
appropriate action plans are carried out in a timely manner.
Whilst the Board considers the risk management framework to be robust to meet the Group’s needs, it will still
subject the framework to continuous improvement, taking into consideration better practices and the changing
business environment.
50
Internal Audit Function
The Board has established the Audit Committee to evaluate the independent internal audit function and
assessing its effectiveness in the discharge of its responsibilities and providing assurance on the adequacy and
effectiveness of the Group’s risk management and internal control system. This is achieved through the adoption
of risk-based internal audit methodology in reviewing key processes of the various business units in the Group
and reporting directly to the Audit Committee on the state of risk management and internal control of the
various business units audited during the financial year.
The internal audit function also follows up on Management’s implementation of action plans it recommends to
improve areas where control deficiencies are noted during internal audit. Further details of the activities of the
internal audit function are provided in the Audit Committee Report.
Internal Control
The key elements of the Group’s internal control system described below are relevant across the Group to
provide for continuous assurance to be given at increasingly higher levels of Management and, finally, to the
Board:

limits of authority and responsibility
Formally defined and documented lines of responsibility and delegation of authority has been established
through the relevant charters/terms of reference, organizational structures and appropriate authority limits.
Hierarchical reporting is also in place to enhance the Group’s ability to achieve its strategies and
operational objectives as well as provide for documented and auditable trail of accountability;

planning, monitoring, reporting and safeguarding

established detailed budgeting process requiring all business segments within the Group to prepare the
annual budget, taking into consideration the strategic plans, capital and operating expenditure for the
upcoming financial year to be compiled by Corporate Office for discussion and approval by the
Executive Committee;

Performance Coordinating Team (“PCT”) comprising Senior Management from each business segment
who reviews operational and financial Key Performance Indicators of their respective business
segments and reports to the EXCO quarterly in assisting them to discharge their oversight role on the
Group’s activities;

the Audit Committee carries out diligent reviews of the quarterly financial results and evaluates the
explanations and reasons for significant unusual variances noted thereof;

comprehensive information, which includes quarterly reports covering all key financial and operational
indicators, is provided to key Management for monitoring of performance against budget and actions to
be taken, where necessary;

Management meetings are held regularly to identify, discuss and resolve strategic, operational,
financial and key management issues;

sufficient insurance and physical safeguards over major assets are in place to ensure that the assets of
the Group are adequately covered against any mishap that may result in material losses to the Group.
51
Adequacy and effectiveness of the Group’s risk management and internal control system
The Board has received assurance in writing from Executive Chairman, Group Managing Directors and the
Group Chief Financial Officer that the Group’s risk management and internal control system has been operating
adequately and effectively, in all material aspects, during the financial year under review and up to the date of
this Statement. Based on this assurance, the input from relevant assurance providers, as well as its review, the
Board is of the view that the Group’s risk management and internal control system is satisfactory to meet the
Group’s needs and has not resulted in any material losses, contingencies or uncertainties that require disclosure
in the Group’s annual report. Cognizant of the importance of the Group’s risk management and internal control
system, the Board continues to take appropriate measures to strengthen the internal control environment and risk
management framework.
52
Corporate Social Responsibility Statement
INTRODUCTION
Oriental Holdings Berhad (“OHB”) recognises the need to place a firm commitment towards corporate social
responsibility (“CSR”) and sustainable development activities, of which stems from fundamental principles of
good corporate governance and striking a harmonious synergy between corporate pursuits and social
obligations.
OHB remains committed to the community, environment, customers, employees and stakeholders. OHB aims to
foster not only positive community relationships, but also help create sustained economic growth by building
human and institutional capacity from our operational sectors.
Highlights of CSR initiatives carried out by the respective Group operational sectors for 2012 include the
following:
THE COMMUNITY
At OHB, community development and care activities are recognised as one of the most important corporate
priorities with various community activities carried out across the Group’s business operations during the
financial year 2012.
During the year, Bayview Hotel Melaka, with support of the Melaka State Health Department and Anlene,
organised a free health screening for citizens on blood pressure, BMI readings, blood sugar, cholesterol and
bone health check. A blood donation campaign was also conducted in collaboration with Hospital Melaka. In
the Group’s Australia operations, Kah Australia has participated in fund raising charities for Cancer Council of
New South Wales and made numerous donations to Sydney’s Children’s Hospital Foundation, Special
Olympics Australia and Volunteering Australia.
The automotive industry continued to contribute for the benefits of the community. Kah Motor (Singapore)
donated SGD 20,000 to National Environment Agency’s 10 th Anniversary Charity Run for Children’s Cancer
Foundation.
In Indonesia, the Group's plantation companies continued to provide financial assistance to village schools for
renovations and oil palm seedlings to school compound. The Group was involved in various community
activities to improve the well being and foster a good and harmonious relationship with the local community.
Such activities included providing machineries assistance to construct and upkeep roads and drain, donations to
public events, mosque, transportation for villagers on pilgrimage, contributions towards annual independence
celebrations and giving out food packages during Hari Raya Aidilfitri to the less privileged.
The Healthcare segment also conducted cleaning, interactive activities and food distribution at Rumah Seri
Kenangan Cheng and Happiness Centre for the mentally disabled children in Malacca.
THE ENVIRONMENT
OHB Group has carried out a number of initiatives to reduce the environmental impact from our business
operations.
OHB’s hotels and resorts segment carried out recycling projects all year round to recycle bottles, newspapers,
and other paper products. The hotels and resorts installed energy saving globes, participated in government
initiated Water Map program and implemented rainwater harvesting system to utilise rainwater. In addition,
hotels and resorts segment also supported the Earth Hour 2012 on 31 March 2012 from 8.30 pm to 9.30 pm.
Bayview Hotel Melaka has also moved towards making the hotel smoke free by placing educational posters and
information in rooms and key cards.
53
Kah New Zealand has been awarded the Qualmark Gold Environment Awards in 2012 in recognition of its high
standards in environmental practices.
In-house water treatments plants are also practiced by manufacturing sector to ensure effluent discharge from
the factory complies with the Environmental Quality Act 1974. Activities such as reducing effluent discharge,
daily industrial waste and lowering energy and material usage were carried out for operational improvements.
The plantation operations initiated recycling projects in the estate to promote greater awareness of the
environmental health and needs. The biological control of rats with the introduction of barn owls has helped in
doing away with usage of pesticides. Zero burning is practiced during all land clearing activities within the
plantation and all land area along watercourses will not be developed.
THE WORKPLACE
OHB Group recognises that success of the Group over the years has been built on the foundation of a skilled and
talented workforce. Therefore, motivating and developing the workplace is very crucial in order to meet the
needs of our different divisions, which call for varying skills, capabilities and expertise from our employees.
The employees are encouraged to develop on both personal and professional level through the conduct of
external and in-house training to enhance employees' knowledge and skills at all levels of employment in order
to meet their responsibilities and perform at their best.
In additions, various staff benefits such as annual dinner, health insurance and medical care are provided to the
employees as a token of appreciation for their contribution towards the performance of the Group.
54
Directors’ report for the year ended 31 December 2012
The Directors have pleasure in submitting their report and the audited financial statements of the Group and of
the Company for the year ended 31 December 2012.
Principal activities
The principal activities of the Company are as follows :
(a) investment holding;
(b) commission agent; and
(c) provision of management services.
The principal activities of its subsidiaries and associates are set out in Note 36 and Note 10 to the financial
statements respectively.
There has been no significant change in the nature of these activities during the financial year.
Results
Group
RM’000
Company
RM’000
200,633
101,921
99,054
-
302,554
99,054
Profit attributable to :
Owners of the Company
Non-controlling interests
Reserves and provisions
There were no material transfers to or from reserves and provisions during the financial year except as disclosed
in the financial statements.
Dividends
Since the end of the previous financial year, the Company paid :
i)
a single tier interim dividend of 3% totalling RM18,610,855 for the year ended 31 December 2011 on 11
May 2012;
ii) a single tier final dividend of 6% totalling RM37,221,710 for the year ended 31 December 2011 on 14
September 2012;
A single tier interim dividend of 4% totalling RM24,814,473 in respect of the year ended 31 December 2012,
was declared by the Directors on 28 February 2013 and payable on 10 May 2013.
A single tier final dividend of 4% totalling RM24,814,473 has been recommended by the Directors in respect of
the year ended 31 December 2012, subject to approval of the stockholders at the forthcoming Annual General
Meeting.
55
Directors of the Company
Directors who served since the date of the last report are:
Dato’ Seri Loh Cheng Yean, DGPN, DSPN
YM Tengku Tan Sri Dato’ Seri Ahmad Rithauddeen Bin Tengku Ismail, PMN, SPMP, SSAP, PMK
Dato’ Seri Lim Su Tong, DGPN, DSPN
Dato’ Dr. Tan Chong Siang, DSPN, DJN, PKT
Datuk Loh Kian Chong, DMSM
Satoshi Okada
Dato’ Sri Tan Hui Jing SSAP, PKT, PJK
(alternate to Dato’ Dr Tan Chong Siang, DSPN, DJN, PKT)
Datin Loh Ean
(alternate to Dato’ Robert Wong Lum Kong, DSSA, JP)
Tan Kheng Hwee
(alternate to Dato’ Seri Loh Cheng Yean, DGPN, DSPN)
Directors’ interests in shares
The holdings in the stocks of the Company and shares of its related corporations (other than wholly-owned
subsidiaries) of those who were Directors at year end (including the interests of the spouse or children of the
Directors) as recorded in the Register of Directors’ Shareholdings are as follows :
Balance at
1.1.2012
Bought
Balance at
31.12.2012
(Sold)
Interest in the Company
Number of Ordinary Stocks of RM1 each
Dato’ Seri Loh Cheng Yean, DGPN, DSPN
Direct interest
- own
486,755
-
-
486,755
Indirect interest
- others *
457,724
-
-
457,724
Direct interest
- own
181,149
-
-
181,149
Indirect interest
- others *
161,872
-
-
161,872
Direct interest
- own
2,966,906
-
-
2,966,906
Indirect interest
- others *
3,872,626
-
-
3,872,626
56
Directors’ interests in shares (continued)
Balance at
1.1.2012
Bought
Balance at
31.12.2012
(Sold)
Interest in the Company
Number of Ordinary Stocks of RM1 each
Dato’ Dr. Tan Chong Siang, DSPN, DJN, PKT
Direct interest
- own
38,307
-
-
38,307
Indirect interest
- others *
25,804
-
-
25,804
18,000
-
-
18,000
1,200
-
-
1,200
337,964,026
9,000,000
-
346,964,026
5,161
-
-
5,161
Direct interest
- own
161,872
-
-
161,872
Indirect interest
- others *
181,149
-
-
181,149
172,032
-
-
172,032
Direct interest
- own
Direct interest
- own
Indirect interest
- own
Indirect interest
- own
Datin Loh Ean
Tan Kheng Hwee
Direct interest
- own
Number of Shares of RM1 each
Interest in subsidiaries
Sharifah Intan Binti S.M. Aidid
Direct interest - own
- Armstrong Auto Parts Sdn. Berhad
- Teck See Plastic Sdn. Bhd.
*
227,318
100,000
-
-
227,318
100,000
These are shares held in the name of the spouses and children and are regarded as interest of the Directors
in accordance with Section 134(12)(c) of the Companies Act, 1965.
57
Directors’ interests in shares (continued)
By virtue of his interests of more than 15% in the stocks of the Company, Datuk Loh Kian Chong is also
deemed interested in the shares of all subsidiaries of the Company to the extent that the Company has an
interest.
None of the other Directors holding office at 31 December 2012 had any interest in the stocks of the Company
and shares of its related corporations during the financial year.
Directors’ benefits
Since the end of the previous financial year, no Director of the Company has received nor become entitled to
receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and
receivable by Directors as shown in the financial statements) by reason of a contract made by the Company or a
related company with the Director or with a firm of which the Director is a member, or with a company in
which the Director has a substantial financial interest other than :(a) certain Directors who received fixed salaries as a full-time employee in the related corporations; and
(b) certain Directors who have significant financial interests in companies which traded with certain companies
in the Group in the ordinary course of business as disclosed in Note 31 to the financial statements.
There were no arrangements during and at the end of the financial year which had the object of enabling
Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the
Company or any other body corporate.
Issue of shares and debentures
There were no changes in the authorised, issued and paid-up capital of the Company and no debentures were
issued by the Company during the financial year.
Options granted over unissued shares
No options were granted to any person to take up unissued shares of the Company during the financial year.
Other statutory information
Before the statements of financial position and statements of comprehensive income of the Group and of the
Company were made out, the Directors took reasonable steps to ascertain that:
i)
all known bad debts have been written off and adequate provision made for doubtful debts, and
ii) any current assets which were unlikely to be realised in the ordinary course of business have been written
down to an amount which they might be expected so to realise.
58
Other statutory information (continued)
At the date of this report, the Directors are not aware of any circumstances:
i)
that would render the amount written off for bad debts, or the amount of the provision for doubtful debts, in
the Group and in the Company inadequate to any substantial extent, or
ii) that would render the value attributed to the current assets in the financial statements of the Group and of
the Company misleading, or
iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the
Group and of the Company misleading or inappropriate, or
iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in
the financial statements of the Group and of the Company misleading.
At the date of this report, there does not exist:
i)
any charge on the assets of the Group or of the Company that has arisen since the end of the financial year
and which secures the liabilities of any other person, or
ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the
financial year.
No contingent liability or other liability of any company in the Group has become enforceable, or is likely to
become enforceable within the period of twelve months after the end of the financial year which, in the opinion
of the Directors, will or may substantially affect the ability of the Group and of the Company to meet their
obligations as and when they fall due.
In the opinion of the Directors, the financial performance of the Group and of the Company for the financial
year ended 31 December 2012 have not been substantially affected by any item, transaction or event of a
material and unusual nature nor has any such item, transaction or event occurred in the interval between the end
of that financial year and the date of this report.
Significant events
Details of the significant events are as disclosed in Note 34 to the financial statements.
Subsequent events
Details of the subsequent events are as disclosed in Note 35 to the financial statements.
59
Auditors
The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors :
Director
Director
Penang,
Date : 23 April 2013
60
Statements of financial position as at 31 December 2012
Note
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
Assets
Intangible assets
Biological assets
Investments in subsidiaries
Investments in associates
Other investments
Deferred tax assets
1,338,313
52,023
214,142
35,823
39,983
492,490
(22,867)
395,989
274,257
7,994
1,117,855
57,261
166,195
37,750
40,521
487,919
(22,867)
334,522
228,527
6,334
569
15,073
585,439
28,291
33,113
-
663
15,077
425,527
27,316
33,113
-
2,828,147
2,454,017
662,485
501,696
2,668
365,338
272,164
45,507
2,624,016
14,339
328,423
259,598
28,859
2,880,330
130,830
337
219,123
356,932
108
259,586
Total current assets
3,309,693
3,511,549
350,290
616,626
Total assets
6,137,840
5,965,566
1,012,775
1,118,322
620,394
595,885
3,381,095
620,394
542,261
3,236,295
620,394
30,060
290,944
620,394
30,060
247,723
4,597,374
4,398,950
941,398
898,177
3
4
5
6
7
8
9
10
11
12
Total non-current assets
Property development costs
Trade and other receivables
Inventories
Current tax assets
Cash and cash equivalents
13
14
15
16
Equity
Share capital
Reserves
Retained earnings
Treasury stocks
Total equity attributable to stockholders
of the Company
Total equity
(249)
17
(249)
(249)
(249)
4,597,125
4,398,701
941,149
897,928
728,276
669,594
-
-
5,325,401
5,068,295
941,149
897,928
61
Statements of financial position as at 31 December 2012 (continued)
Note
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
Liabilities
Deferred tax liabilities
Borrowings
Provisions
Deferred income
25,321
26,480
3,989
13,154
20,766
9,127
3,036
8,131
-
-
68,944
41,060
-
-
282,501
451,787
9,207
307,892
525,762
22,557
1,103
70,523
-
21,039
199,355
-
Total current liabilities
743,495
856,211
71,626
220,394
Total liabilities
812,439
897,271
71,626
220,394
6,137,840
5,965,566
1,012,775
1,118,322
12
18
19
20
Total non-current liabilities
Trade and other payables
Borrowings
Current tax liabilities
Total equity and liabilities
21
18
The notes on pages 71 to 161 are an integral part of these financial statements.
62
Statements of comprehensive income for the year ended
31 December 2012
Note
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
Continuing operations
Revenue
22
Cost of sales
Gross profit
2,807,049
3,108,998
(2,166,281)
(2,289,582)
103,885
83,131
-
-
103,885
83,131
640,768
819,416
(45,377)
(188,019)
(138,427)
40,195
(46,281)
(182,885)
(194,271)
38,262
(4,214)
(199)
21,475
(3,969)
(8,111)
3,214
(331,628)
(385,175)
17,062
(8,866)
Results from operating activities
309,140
434,241
120,947
74,265
Interest expense
(10,090)
(10,375)
299,050
423,866
118,220
72,213
76,695
37,189
-
-
375,745
461,055
118,220
72,213
(73,191)
(91,808)
(19,166)
(9,112)
302,554
369,247
99,054
63,101
(8,756)
59,242
-
-
32,013
(30,163)
-
-
6,616
-
-
-
Distribution expenses
Administration expenses
Other operating expenses
Other operating income
Operating profit
22
Share of profit after tax of
equity accounted associates
Profit before tax
Income tax expense
Profit for the year
25
(2,727)
(2,052)
Other comprehensive (expense)/income,
net of tax
Foreign currency translation differences
for foreign operations
Fair value of available-for-sale financial
assets
Share of other comprehensive income of
equity accounted associates
Total other comprehensive income for the
year
29,873
29,079
-
-
Total comprehensive income for the year
332,427
398,326
99,054
63,101
63
Statements of comprehensive income for the year ended
31 December 2012 (continued)
Note
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
Profit attributable to :
Profit for the year
200,633
101,921
270,156
99,091
99,054
-
63,101
-
302,554
369,247
99,054
63,101
254,257
78,170
298,180
100,146
99,054
-
63,101
-
332,427
398,326
99,054
63,101
32.34
43.55
Total comprehensive income
attributable to :
Total comprehensive income for the year
Basic earnings per ordinary stock (sen)
26
64
(AND ITS SUBSIDIARIES
Statement of changes in equity for the year ended 31 December 2012
Attributable to stockholders of the Company
Non-distributable
Foreign
currency
Capital
Asset
translation Fair value redemption revaluation
reserve
reserve
reserve
reserve
RM’000
RM’000
RM’000
RM’000
Distributable
Total
RM’000
Noncontrolling
interests
RM’000
Total
equity
RM’000
40,248
4,137,743
600,987
4,738,730
-
-
56,095
3,147
59,242
-
-
-
(28,071)
(2,092)
(30,163)
-
-
-
-
28,024
1,055
29,079
-
-
270,156
-
270,156
99,091
369,247
-
-
-
270,156
-
298,180
100,146
398,326
-
-
-
-
(37,222)
-
(37,222)
-
-
-
-
-
-
-
-
(8,592)
(8,592)
-
-
-
-
-
-
-
-
-
(25,831)
(25,831)
-
-
-
-
-
-
-
-
-
-
(158)
(158)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
620,394
1,099
1,073
460,226
39,073
68
474
Share
capital
RM’000
Share
premium
RM’000
Capital
reserve
RM’000
620,394
1,099
1,073
404,131
67,144
68
474
Foreign currency translation
differences for foreign operations
-
-
-
56,095
-
-
-
Fair value of available-for-sale
financial assets
-
-
-
-
(28,071)
-
Total other comprehensive
(expense)/income for the year
-
-
-
56,095
(28,071)
-
Profit for the year
-
-
-
-
Total comprehensive (expense)/
income for the year
-
-
-
56,095
Dividends to stockholders
-
-
-
-
Dividends paid to non-controlling
interests
-
-
-
Acquisition of subsidiaries
-
-
Disposal of subsidiary
-
Shares issued to non-controlling
interests
Total distribution to owners
Treasury
stocks
RM’000
Retained
earnings
RM’000
Capital
reserve
RM’000
3,003,361
-
-
Group
At 1 January 2011
At 31 December 2011
-
(28,071)
65
(249)
(249)
(37,222)
3,236,295
40,248
(37,222)
4,398,701
-
(37,222)
3,042
3,042
(31,539)
(68,761)
669,594
5,068,295
Statement of changes in equity for the year ended 31 December 2012 (continued)
Attributable to stockholders of the Company
Non-distributable
Foreign
currency
Capital
Asset
translation Fair value redemption revaluation
reserve
reserve
reserve
reserve
RM’000
RM’000
RM’000
RM’000
Distributable
Total
RM’000
Noncontrolling
interests
RM’000
Total
equity
RM’000
40,248
4,398,701
669,594
5,068,295
-
-
18,363
(27,119)
(8,756)
-
-
-
28,645
3,368
32,013
-
-
-
-
6,616
-
6,616
-
-
-
-
-
53,624
(23,751)
29,873
-
-
-
-
200,633
-
200,633
101,921
302,554
18,363
35,261
-
-
-
200,633
-
254,257
78,170
332,427
-
-
-
-
-
-
(55,833)
-
(55,833)
-
-
-
-
-
-
-
-
-
-
(20,678)
(20,678)
-
-
-
-
-
-
-
-
-
-
-
1,190
1,190
-
-
-
-
-
-
-
-
(19,488)
(75,321)
620,394
1,099
1,073
478,589
74,334
68
474
Group
Share
capital
RM’000
Share
premium
RM’000
Capital
reserve
RM’000
At 1 January 2012
620,394
1,099
1,073
460,226
39,073
68
474
Foreign currency translation
differences for foreign operations
-
-
-
18,363
-
-
-
Fair value of available-for-sale
financial assets
-
-
-
-
28,645
-
Share of other comprehensive income
of equity accounted associates
-
-
-
-
6,616
Total other comprehensive
(expense)/income for the year
-
-
-
18,363
Profit for the year
-
-
-
Total comprehensive
income for the year
-
-
-
Dividends paid to non-controlling
interests
Retained
earnings
RM’000
Capital
reserve
RM’000
3,236,295
-
-
-
35,261
-
-
-
-
Shares issued to non-controlling
interests
Total distribution to owners
At 31 December 2012
66
Treasury
stocks
RM’000
(249)
(249)
(55,833)
3,381,095
40,248
(55,833)
4,597,125
-
728,276
(55,833)
5,325,401
Statements of changes in equity for the year ended
31 December 2012 (continued)
Note
Share
capital
RM’000
Non-distributable
Capital
redemption Treasury
reserve
stocks
RM’000
RM’000
Distributable
Retained
earnings
RM’000
Capital
reserve
RM’000
Total
equity
RM’000
221,844
29,992
872,049
Company
At 1 January 2011
Profit for the year representing total
comprehensive income
27
At 31 December 2011/
1 January 2012
Profit for the year representing total
comprehensive income
At 31 December 2012
27
620,394
68
(249)
-
-
-
63,101
-
63,101
-
-
-
(37,222)
-
(37,222)
620,394
68
-
-
-
-
620,394
68
(249)
247,723
29,992
897,928
-
99,054
-
99,054
-
(55,833)
-
(55,833)
(249)
67
290,944
29,992
941,149
Statements of cash flows for the year ended 31 December 2012
Note
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
Cash flows from operating activities
Profit before tax from continuing
operations
Adjustments for :
Amortisation of :
- biological assets
- prepaid land lease payments
- development cost
Depreciation of :
- property, plant and equipment
- investment properties
Dividend income (gross)
Interest expense
Interest income
(Gain)/Loss on disposal of :
- a subsidiary
- associates
- other investments
Asset written off
- biological assets
Share of profits in associates
Unrealised (gain)/loss on foreign
exchange
(Reversal of)/Impairment loss on
investment in :
- plant and equipment
- investment in subsidiaries
- other investments
- intangible assets
(Gain)/Loss on liquidation of a
subsidiary
375,745
461,055
118,220
72,213
5
7
4
11,728
278
182
12,217
414
162
-
-
3
8
90,919
3,451
(13,095)
10,090
(68,660)
89,051
2,018
(57,448)
10,375
(59,823)
104
4
(91,304)
2,727
(11,463)
85
4
(73,184)
2,052
(9,137)
(3,132)
293
(1,787)
(25,003)
2
26
(1,958)
(1,067)
-
(57)
(1,704)
-
1,273
193
(76,695)
4,939
(37,189)
-
29
-
22
(15,628)
25,113
(9,751)
12,816
3
22
22
4
(885)
5,359
22
(5,297)
524
-
-
316,119
442,092
7,470
2,290
Operating profit before changes in working
capital
68
(4,800)
12,791
11,413
-
(827)
-
(continued)
Note
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
Changes in working capital :
Inventories
Cash generated from/(used in) operations
Dividends received (net)
Interest received
Interest paid
Tax paid
Net cash from operating activities
11,669
(19,887)
(15,384)
(21,607)
(8,153)
9,921
46,612
16,192
66,190
(19,936)
(19,214)
(3,306)
(45,209)
64,572
46,254
(22,520)
270,910
506,664
53,742
(20,230)
227
(9,271)
(107,019)
149
(10,900)
(88,168)
74,005
(2,727)
(2,096)
64,807
(2,052)
(962)
154,847
407,745
(303)
(396)
(311,890)
(11,594)
(76,709)
33,940
66,672
(961)
(35,246)
(94,474)
(31,911)
(810)
72,760
58,269
(10)
11,463
-
(390)
-
-
-
(129,586)
-
-
122,906
41,563
Cash flows from investing activities
Additions of :
- intangible assets
- land held for property development
- investment properties
- biological assets
Prepayment of land lease
Dividends received
Interest received
Net cash outflow on disposal
of a subsidiary
Net cash outflow on acquisition of
subsidiaries
Proceeds from disposal of :
- other investments
- associates
Purchase of :
- other investments
- associates
- subsidiaries
Net cash (used in)/from investing
activities
4
6
A
8
5
7
(337)
9,137
50,348
1,092
5,293
-
33,160
1,968
36,237
30,680
1,092
-
1,968
69
-
(53,142)
-
(49,484)
-
(1,000)
-
(1,400)
(296,689)
(109,788)
11,545
9,437
69
(continued)
Note
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
Cash flows from financing activities
Dividends paid to :
- non-controlling interests
- stockholders of the Company
Withdrawal of fixed deposits pledged for
banking facilities
Repayment of lease obligations
Other bank borrowings, net
Proceeds from issue of shares to noncontrolling interests
Net cash (used in)/from financing activities
Net (decrease)/increase in cash and cash
equivalents
(20,678)
(55,833)
(8,592)
(55,833)
(55,833)
(55,833)
42,454
(1,062)
(8,735)
53,147
(807)
5,299
(119,081)
50,285
94,107
1,190
3,042
(42,664)
(3,744)
(184,506)
Cash and cash equivalents at 1 January
2,831,678
Effect of exchange rate fluctuations on
cash held
Cash and cash equivalents at 31 December
(28,441)
B
2,618,731
-
-
(174,914)
88,559
(40,463)
139,559
2,499,025
259,586
120,027
38,440
-
-
2,831,678
219,123
259,586
294,213
Notes
A. Acquisition of property, plant and equipment
During the financial year, the Group acquired property, plant and equipment with an aggregate cost of
RM315,749,000 (2011 : RM95,147,000) of which RM3,859,000 (2011 : RM673,000) was acquired by hire
purchase/lease arrangements.
B. Cash and cash equivalents
Cash and cash equivalents included in the statements of cash flows comprise the following statements of
financial position amounts :
Group
2012
2011
RM’000
RM’000
Cash and bank balances
Fixed deposits
Bank overdrafts
Unit trust money market funds
Company
2012
2011
RM’000
RM’000
597,717
1,857,095
(5,212)
169,204
430,126
2,450,204
(6,125)
-
3,610
121,658
93,855
1,777
257,809
-
2,618,804
2,874,205
219,123
259,586
-
-
219,123
259,586
Less : Deposits pledged (Note 16.1)
(73)
2,618,731
(42,527)
2,831,678
70
Notes to the financial statements
Oriental Holdings Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is
listed on the Main Market of Bursa Malaysia Securities Berhad. The addresses of the registered office and
principal place of business of the Company are as follows :
Registered office
42A, Jalan Sultan Ahmad Shah
10050 Penang
Principal place of business
1st Floor, 25B Lebuh Farquhar
10200 Penang
The consolidated financial statements of the Company as at and for the year ended 31 December 2012 comprise
the Company and its subsidiaries (together referred to as the “Group” and individually referred to as “Group
entities”) and the Group’s interest in associates.
The principal activities of the Company are as follows :
(a) investment holding;
(b) commission agent; and
(c) provision of management services.
The principal activities of its subsidiaries and associates are set out in Notes 36 and 10 to the financial
statements respectively.
These financial statements were authorised for issue by the Board of Directors on 23 April 2013.
1.
Basis of preparation
(a) Statement of compliance
These financial statements of the Group and the Company have been prepared in accordance with
Financial Reporting Standards (FRSs) and the Companies Act, 1965 in Malaysia.
The following are accounting standards, amendments and interpretations that have been issued by
the Malaysian Accounting Standards Board (MASB) but have not been adopted by the Group and
the Company:
FRSs, Interpretations and amendments effective for annual periods beginning on or after 1
July 2012
 Amendments to FRS 101, Presentation of Financial Statements - Presentation of Items of
Other Comprehensive Income
71
1.
Basis of preparation (continued)
(a)
Statement of compliance (continued)
January 2013
 FRS 10, Consolidated Financial Statements
 FRS 11, Joint Arrangements
 FRS 12, Disclosure of Interests in Other Entities
 FRS 13, Fair Value Measurement
 FRS 119, Employee Benefits (2011)
 FRS 127, Separate Financial Statements (2011)
 FRS 128, Investments in Associates and Joint Ventures (2011)
 IC Interpretation 20, Stripping Costs in the Production Phase of a Surface Mine
 Amendments to FRS 7, Financial Instruments: Disclosures - Offsetting Financial Assets and
Financial Liabilities
 Amendments to FRS 1, First-time Adoption of Financial Reporting Standards – Government
Loans
 Amendments to FRS 1, First-time Adoption of Financial Reporting Standards (Annual
Improvements 2009-2011 Cycle)
 Amendments to FRS 101, Presentation of Financial Statements (Annual Improvements 20092011 Cycle)
 Amendments to FRS 116, Property, Plant and Equipment (Annual Improvements 2009-2011
Cycle)
 Amendments to FRS 132, Financial Instruments: Presentation (Annual Improvements 20092011 Cycle)
 Amendments to FRS 134, Interim Financial Reporting (Annual Improvements 2009-2011
Cycle)
 Amendments to FRS 10, Consolidated Financial Statements: Transition Guidance
 Amendments to FRS 11, Joint Arrangements: Transition Guidance
 Amendments to FRS 12, Disclosure of Interests in Other Entities: Transition Guidance
January 2014
 Amendments to FRS 10, Consolidated Financial Statements: Investment Entities
 Amendments to FRS 12, Disclosure of Interests in Other Entities: Investment Entities
 Amendments to FRS 127, Separate Financial Statements (2011): Investment Entities
 Amendments to FRS 132, Financial Instruments: Presentation - Offsetting Financial Assets
and Financial Liabilities
January 2015
 FRS 9, Financial Instruments (2010)
 FRS 9, Financial Instruments (2011)
 Amendments to FRS 7, Financial Instruments: Disclosures - Mandatory Effective Date of
FRS 9 and Transition Disclosures
The Group and the Company plan to apply the above standards, amendments or interpretations
from the annual period beginning on 1 January 2013 for those standards, amendments or
interpretations that are effective for annual periods beginning on or after 1 July 2012 and 1
January 2013.
72
1.
Basis of preparation (continued)
(a)
Statement of compliance (continued)
Material impacts of initial application of a standard, an amendment or an interpretation, which will
be applied retrospectively, are discussed below:
(i) Amendments to FRS 116, Property, Plant and Equipment (Annual Improvements 20092011 Cycle)
The amendments to FRS 116 clarify that items such as spare parts, stand-by equipment and
servicing equipment shall be recognised as property, plant and equipment when they meet the
definition of property, plant and equipment. Otherwise, such items are classified as inventory.
The initial application of the other standards, amendments and interpretations are not expected to
have any material financial impacts on the financial statements of the Group and the Company.
The Group’s and the Company’s financial statements for annual period beginning on 1 January
2014 will be prepared in accordance with the Malaysian Financial Reporting Standards (MFRS)
issued by MASB and International Financial Reporting Standards (IFRS). As a result, the Group
and the Company will not be adopting FRSs, Interpretations and amendments that are effective for
annual periods beginning on or after 1 January 2014 and 1 January 2015.
(b)
Basis of measurement
These financial statements have been prepared on the historical cost basis unless otherwise stated.
(c)
Functional and presentation currency
These financial statements are presented in Ringgit Malaysia (RM), which is the Company’s
functional currency. All financial information is presented in RM and has been rounded to the
nearest thousand, unless otherwise stated.
(d)
Use of estimates and judgements
The preparation of the financial statements in conformity with Financial Reporting Standards
requires management to make judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimates are revised and in any future periods
affected.
There are no significant areas of estimation uncertainty and critical judgements in applying
accounting policies that have significant effect on the amounts recognised in the financial
statements other than those disclosed in the following notes :
Note 3 - assessment on impairment of property, plant and equipment
Note 4 - assessment on impairment of goodwill
Note 12 - recognition of deferred tax assets
73
2.
Significant accounting policies
The accounting policies set out below have been applied consistently to the periods presented in these
financial statements, and have been applied consistently by the Group entities.
(a)
Basis of consolidation
(i)
Subsidiaries
Subsidiaries are entities, including unincorporated entities, controlled by the Company. The
financial statements of subsidiaries are included in the consolidated financial statements
from the date that control commences until the date that control ceases. Control exists when
the Company has the ability to exercise its power to govern the financial and operating
policies of an entity so as to obtain benefits from its activities. In assessing control, potential
voting rights that presently are exercisable are taken into account.
Investments in subsidiaries are measured in the Company’s statement of financial position
at cost less any impairment losses, unless the investment is classified as held for sale or
distribution. The cost of investments includes transaction costs.
(ii)
Accounting for business combinations
Business combinations are accounted for using the acquisition method from the acquisition
date, which is the date on which control is transferred to the Group.
Acquisitions on or after 1 January 2011
For acquisitions on or after 1 January 2011, the Group measures the cost of goodwill at the
acquisition date as :




the fair value of the consideration transferred; plus
the recognised amount of any non-controlling interests in the acquiree; plus
if the business combination is achieved in stages, the fair value of the existing equity
interest in the acquiree; less
the net recognised amount (generally fair value) of the identifiable assets acquired and
liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or
loss.
For each business combination, the Group elects whether it measures the non-controlling
interests in the acquiree either at fair value or at proportionate share of the acquiree’s
identifiable net assets at the acquisition date.
Transaction costs, other than those associated with the issue of debt or equity securities, that
the Group incurs in connection with a business combination are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If
the contingent consideration is classified as equity, it is not remeasured and settlement is
accounted for within equity. Otherwise, subsequent changes to the fair value of the
contingent consideration are recognised in profit or loss.
When share-based payment awards (replacement awards) are required to be exchanged for
awards held by the acquiree’s employees (acquiree’s awards) and relate to past services,
then all or a portion of the amount of the acquirer’s replacement awards is included in
measuring the consideration transferred in the business combination. This determination is
based on the market-based value of the replacement awards compared with the marketbased value of the acquiree’s awards and the extent to which the replacement awards relate
to past and/or future service.
74
2.
Significant accounting policies (continued)
(a)
Basis of consolidation (continued)
(ii)
Accounting for business combinations (continued)
Acquisitions between 1 January 2006 and 1 January 2011
For acquisitions between 1 January 2006 and 1 January 2011, goodwill represents the
excess of the cost of the acquisition over the Group’s interest in the recognised amount
(generally fair value) of the identifiable assets, liabilities and contingent liabilities of the
acquiree. When the excess was negative, a bargain purchase gain was recognised
immediately in profit or loss.
Transaction costs, other than those associated with the issue of debt or equity securities, that
the Group incurred in connection with business combinations were capitalised as part of the
cost of the acquisition.
Acquisitions prior to 1 January 2006
For acquisitions prior to 1 January 2006, goodwill represents the excess of the cost of the
acquisition over the Group’s interest in the fair values of the net identifiable assets and
liabilities.
(iii)
Acquisitions of non-controlling interests
The Group treats all changes in its ownership interest in a subsidiary that do not result in a
loss of control as equity transactions between the Group and its non-controlling interest
holders. Any difference between the Group’s share of net assets before and after the
change, and any consideration received or paid, is adjusted to or against Group reserves.
(iv)
Acquisitions from entities under common control
Business combinations arising from transfers of interests in entities that are under the
control of the shareholder that controls the Group are accounted for as if the acquisition had
occurred at the beginning of the earliest comparative period presented or, if later, at the date
that common control was established. For this purpose, comparatives are restated. The
assets and liabilities acquired are recognised at the carrying amounts recognised previously
in the Group controlling shareholder’s consolidated financial statements. The components
of equity of the acquired entities are added to the same components within Group equity
and any resulting gain/loss is recognised directly in equity.
(v)
Loss of control
Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of
the subsidiary, any non-controlling interests and the other components of equity related to
the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or
loss. If the Group retains any interest in the previous subsidiary, then such interest is
measured at fair value at the date that control is lost. Subsequently it is accounted for as an
equity-accounted investee or as an available-for-sale financial asset depending on the level
of influence retained.
75
2.
(a)
(vi)
Associates
Associates are entities, including unincorporated entities, in which the Group has significant
influence, but not control, over the financial and operating policies.
Investment in associates are accounted for in the consolidated financial statements using the
equity method less any impairment losses, unless it is classified as held for sale or
distribution (or included in a disposal group that is defined as held for sale or distribution).
The cost of the investment includes transaction costs. The consolidated financial statements
include the Group’s share of the profit or loss and other comprehensive income of the
equity-accounted associates, after adjustments if any, to align the accounting policies with
those of the Group, from the date that significant influence ceases.
When the Group’s share of losses exceeds its interest in an associate, the carrying amount
of that interest (including any long-term investments) is reduced to zero, and the recognition
of further losses is discontinued except to the extent that the Group has an obligation or has
made payments on behalf of the associate.
When the Group ceases to have significant influence over an associate, it is accounted for as
a disposal of the entire interest in that associate, with a resulting gain or loss being
recognised in profit or loss. Any retained interest in the former associate at the date when
significant influence is lost is re-measured at fair value and this amount is regarded as the
initial carrying amount of a financial asset.
When the Group’s interest in an associate decreases but does not result in a loss of
significant influence, any retained interest is not re-measured. Any gain or loss arising from
the decrease in interest is recognised in profit or loss. Any gains or losses previously
recognised in other comprehensive income are also reclassified proportionately to profit or
loss.
Investments in associates are measured in the Company’s statement of financial position at
cost less any impairment losses, unless the investment is classified as held for sale or
distribution. The cost of the investment includes transaction costs.
(vii) Non-controlling interests
Non-controlling interests at the end of the reporting period, being the equity in a subsidiary
not attributable directly or indirectly to the equity holders of the Company, are presented in
the consolidated statement of financial position and statement of changes in equity within
equity, separately from equity attributable to the owners of the Company. Non-controlling
interests in the results of the Group is presented in the consolidated statement of
comprehensive income as an allocation of the profit or loss and the comprehensive income
for the year between non-controlling interests and the owners of the Company.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the noncontrolling interests even if doing so causes the non-controlling interest to have a deficit
balance.
76
2.
(a)
(viii) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from
intra-group transactions, are eliminated in preparing the consolidated financial statements.
Unrealised gains arising from transactions with equity-accounted associates are eliminated
against the investment to the extent of the Group’s interest in the associates. Unrealised
losses are eliminated in the same way as unrealised gains, but only to the extent that there is
no evidence of impairment.
(b)
Foreign currency
(i)
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of
Group entities at exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the end of the reporting
period are retranslated to the functional currency at the exchange rate at that date.
Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at
the end of the reporting date except for those that are measured at fair value are retranslated
to the functional currency at the exchange rate at the date that the fair value was
determined.
Foreign currency differences arising on retranslation are recognised in profit or loss, except
for differences arising on the retranslation of available-for-sale equity instruments or a
financial instrument designated as a hedge of currency risk, which are recognised in other
comprehensive income.
(ii)
Operations denominated in functional currencies other than Ringgit Malaysia
The assets and liabilities of operations denominated in functional currencies other than RM,
including goodwill and fair value adjustments arising on acquisition, are translated to RM at
exchange rates at the end of the reporting period, except for goodwill and fair value
adjustments arising from business combinations before 1 January 2006 which are reported
using the exchange rates at the dates of the acquisitions. The income and expenses of
foreign operations, are translated to RM at exchange rates at the dates of the transactions.
Foreign currency differences are recognised in other comprehensive income and
accumulated in the foreign currency translation reserve (FCTR) in equity. However, if the
operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the
translation difference is allocated to the non-controlling interests. When a foreign operation
is disposed of such that control, significant influence or joint control is lost, the cumulative
amount in the FCTR related to that foreign operation is reclassified to profit or loss as part
of the profit or loss on disposal.
77
2.
(b)
Foreign currency (continued)
(ii)
Operations denominated in functional currencies other than Ringgit Malaysia
(continued)
When the Group disposes of only part of its interest in a subsidiary that includes a foreign
operation while retaining control, the relevant proportion of the cumulative amount is
reattributed to non-controlling interests. When the Group disposes of only part of its
investment in an associate or joint venture that includes a foreign operation while retaining
significant influence or joint control, the relevant proportion of the cumulative amount is
reclassified to profit or loss.
In the consolidated financial statements, when settlement of a monetary item receivable
from or payable to a foreign operation is neither planned nor likely in the foreseeable
future, foreign exchange gains and losses arising from such a monetary item are considered
to form part of a net investment in a foreign operation and are recognised in other
comprehensive income, and are presented in the FCTR within equity.
(c)
Financial instruments
(i)
Initial recognition and measurement
A financial asset or a financial liability is recognised in the statement of financial position
when, and only when, the Group or the Company becomes a party to the contractual
provisions of the instrument.
A financial instrument is recognised initially, at its fair value plus, in the case of a financial
instrument not at fair value through profit or loss, transaction costs that are directly
attributable to the acquisition or issue of the financial instrument.
An embedded derivative is recognised separately from the host contract and accounted for
as a derivative if, and only if, it is not closely related to the economic characteristics and
risks of the host contract and the host contract is not categorised at fair value through profit
or loss. The host contract, in the event an embedded derivative is recognised separately, is
accounted for in accordance with policy applicable to the nature of the host contract.
(ii)
Financial instrument categories and subsequent measurement
The Group and the Company categorise financial instruments as follows:
Financial assets
(a)
Financial assets at fair value through profit or loss
Fair value through profit or loss category comprises financial assets that are held for
trading, including derivatives (except for a derivative that is a financial guarantee
contract or a designated and effective hedging instrument) or financial assets that are
specifically designated into this category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity
instruments whose fair values cannot be reliably measured are measured at cost.
Other financial assets categorised as fair value through profit or loss are subsequently
measured at their fair values with the gain or loss recognised in profit or loss.
78
2.
(c)
Financial instruments (continued)
(ii)
Financial instrument categories and subsequent measurement (continued)
(b)
Held-to-maturity investments
Held-to-maturity investments category comprises debt instruments that are quoted in
an active market and the Group or the Company has the positive intention and ability
to hold them to maturity.
Financial assets categorised as held-to-maturity investments are subsequently
measured at amortised cost using the effective interest method.
(c)
Loans and receivables
Loans and receivables category comprises debt instruments that are not quoted in an
active market.
Financial assets categorised as loans and receivables are subsequently measured at
amortised cost using the effective interest method.
(d)
Available-for-sale financial assets
Available-for-sale category comprises investment in equity and debt securities
instruments that are not held for trading.
Investments in equity instruments that do not have a quoted market price in an active
market and whose fair value cannot be reliably measured are measured at cost. Other
financial assets categorised as available-for-sale are subsequently measured at their
fair values with the gain or loss recognised in other comprehensive income, except
for impairment losses, foreign exchange gains and losses arising from monetary
items and gains and losses of hedged items attributable to hedge risks of fair value
hedges which are recognised in profit or loss. On derecognition, the cumulative gain
or loss recognised in other comprehensive income is reclassified from equity into
profit or loss. Interest calculated for a debt instrument using the effective interest
method is recognised in profit or loss.
All financial assets, except for those measured at fair value through profit or loss, are
subject to review for impairment (see note 2(p)(i)).
Financial liabilities
All financial liabilities are subsequently measured at amortised cost other than those
categorised as fair value through profit or loss.
Fair value through profit or loss category comprises financial liabilities that are derivatives
(except for a derivative that is a financial guarantee contract or a designated and effective
hedging instrument) or financial liabilities that are specifically designated into this
category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity
instruments whose fair values cannot be reliably measured are measured at cost.
Other financial liabilities categorised as fair value through profit or loss are subsequently
measured at their fair values with the gain or loss recognised in profit or loss.
79
2.
(c)
Financial instruments (continued)
(iii) Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified
payments to reimburse the holder for a loss it incurs because a specified debtor fails to
make payment when due in accordance with the original or modified terms of a debt
instrument.
Financial guarantee contracts are classified as deferred income and are amortised to profit
or loss using a straight-line method over the contractual period or, when there is no
specified contractual period, recognised in profit or loss upon discharge of the guarantee.
When settlement of a financial guarantee contract becomes probable, an estimate of the
obligation is made. If the carrying value of the financial guarantee contract is lower than the
obligation, the carrying value is adjusted to the obligation amount and accounted for as a
provision.
(iv)
Regular way purchase or sale of financial assets
A regular way purchase or sale is a purchase or sale of a financial asset under a contract
whose terms require delivery of the asset within the time frame established generally by
regulation or convention in the marketplace concerned.
A regular way purchase or sale of financial assets is recognised and derecognised, as
applicable, using trade date accounting. Trade date accounting refers to:
(a)
(b)
(v)
the recognition of an asset to be received and the liability to pay for it on the trade
date, and
derecognition of an asset that is sold, recognition of any gain or loss on disposal and
the recognition of a receivable from the buyer for payment on the trade date.
Derecognition
A financial asset or part of it is derecognised when, and only when the contractual rights to
the cash flows from the financial asset expire or the financial asset is transferred to another
party without retaining control or substantially all risks and rewards of the asset. On
derecognition of a financial asset, the difference between the carrying amount and the sum
of the consideration received (including any new asset obtained less any new liability
assumed) and any cumulative gain or loss that had been recognised in equity is recognised
in profit or loss.
A financial liability or a part of it is derecognised when, and only when, the obligation
specified in the contract is discharged or cancelled or expires. On derecognition of a
financial liability, the difference between the carrying amount of the financial liability
extinguished or transferred to another party and the consideration paid, including any noncash assets transferred or liabilities assumed, is recognised in profit or loss.
80
2.
(d)
(i)
Recognition and measurement
Freehold land and capital work-in-progress are measured at cost/valuation less any
accumulated impairment losses. All other property, plant and equipment are measured at
cost/valuation less any accumulated depreciation and any accumulated impairment losses.
The Group has availed itself to the transitional provision when the MASB first adopted IAS
16, Property, Plant and Equipment in 1998. Certain properties were revalued in 1976 and
1978 and no later valuation has been recorded for these property, plant and equipment.
Cost includes expenditures that are directly attributable to the acquisition of the asset and
any other costs directly attributable to bringing the asset to working condition for its
intended use, and the costs of dismantling and removing the items and restoring the site on
which they are located. The cost of self-constructed assets also includes the cost of
materials and direct labour. For qualifying assets, borrowing costs are capitalised in
accordance with the accounting policy on borrowing costs. Purchased software that is
integral to the functionality of the related equipment is capitalised as part of that equipment.
The cost of property, plant and equipment recognised as a result of a business combination
is based on fair value at acquisition date. The fair value of property is the estimated amount
for which a property could be exchanged between knowledgeable willing parties in an
arm’s length transaction after proper marketing wherein the parties had each acted
knowledgeably, prudently and without compulsion. The fair value of other items of plant
and equipment is based on the quoted market prices for similar items when available and
replacement cost when appropriate.
When significant parts of an item of property, plant and equipment have different useful
lives, they are accounted for as separate items (major components) of property, plant and
equipment.
The gain or loss on disposal of an item of property, plant and equipment is determined by
comparing the proceeds from disposal with the carrying amount of property, plant and
equipment and is recognised net within “other operating income” and “other operating
expenses” respectively in profit or loss. When revalued assets are sold, the amounts
included in the revaluation surplus reserve are transferred to retained earnings.
(ii)
Subsequent costs
The cost of replacing a component of an item of property, plant and equipment is
recognised in the carrying amount of the item if it is probable that the future economic
benefits embodied within the component will flow to the Group or the Company, and its
cost can be measured reliably. The carrying amount of the replaced component is
derecognised to profit or loss. The costs of the day-to-day servicing of property, plant and
equipment are recognised in profit or loss as incurred.
81
2.
(d)
Property, plant and equipment (continued)
(iii)
Depreciation
Depreciation is calculated based on the cost of an asset less its residual value. Significant
component of individual assets are assessed, and if a component has a useful life that is
different from the remainder of that asset, then that component is depreciated separately.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful
lives of each component of an item of property, plant and equipment. Leased assets are
depreciated over the shorter of the lease term and their useful lives unless it is reasonably
certain that the Group will obtain ownership by the end of the lease term. Freehold land is
not depreciated. Property, plant and equipment under construction are not depreciated until
the assets are ready for their intended use.
The depreciation rates for the current and comparative periods based on their estimated
useful lives are as follows :
%





Buildings
Assembly plant
Plant and machinery
Furniture, fixtures, fittings and equipment
Vehicles
2 - 10
5 - 20
7 - 33 1/3
5 - 50
20
The initial cost of hotel operating equipment (included under furniture, fixtures, fittings and
equipment) such as linen, crockery, glassware, cutlery and kitchen utensils has been
capitalised and is not depreciated. Subsequent acquisition to replace these operating assets
are written off in the year in which they are incurred.
Depreciation methods, useful lives and residual values are reviewed at the end of the
reporting period and adjusted as appropriate.
(e)
Leased assets
(i)
Finance lease
Leases in terms of which the Group assumes substantially all the risks and rewards of
ownership are classified as finance leases. Upon initial recognition, the leased asset is
measured at an amount equal to the lower of its fair value and the present value of the
minimum lease payments. Subsequent to initial recognition, the asset is accounted for in
accordance with the accounting policy applicable to that asset.
Minimum lease payments made under finance leases are apportioned between the finance
expense and the reduction of the outstanding liability. The finance expense is allocated to
each period during the lease term so as to produce a constant periodic rate of interest on the
remaining balance of the liability. Contingent lease payments are accounted for by revising
the minimum lease payments over the remaining term of the lease when the lease
adjustment is confirmed.
Leasehold land which in substance is a finance lease is classified as property, plant and
equipment.
82
2.
(e)
Leased assets (continued)
(ii)
Operating lease
Leases, where the Group does not assume substantially all the risks and rewards of the
ownership are classified as operating leases and, except for property interest held under
operating lease, the leased assets are not recognised on the statement of financial position.
Property interest held under an operating lease, which is held to earn rental income or for
capital appreciation or both, is classified as investment property, and measured using fair
value model.
Payments made under operating leases are recognised in profit or loss on a straight-line
basis over the term of the lease. Lease incentives received are recognised in profit or loss as
an integral part of the total lease expense, over the term of the lease. Contingent rentals are
charged to profit or loss in the reporting period in which they are incurred. Leasehold land
which in substance is an operating lease is classified as prepaid land lease payments.
(f)
Intangible assets
(i)
Goodwill
Goodwill arises on business combinations is measured at cost less any accumulated
impairment losses. In respect of equity-accounted investees, the carrying amount of
goodwill is included in the carrying amount of the investment and an impairment loss on
such an investment is not allocated to any asset, including goodwill, that forms part of the
carrying amount of the equity-accounted investees.
(ii)
Research and development
Expenditure on research activities, undertaken with the prospect of gaining new scientific or
technical knowledge and understanding, is recognised in profit or loss as incurred.
Expenditure on development activities, whereby the application of research findings are
applied to a plan or design for the production of new or substantially improved products and
processes, is capitalised only if development costs can be measured reliably, the product or
process is technically and commercially feasible, future economic benefits are probable and
the Group intends to and has sufficient resources to complete development and to use or sell
the asset.
The expenditure capitalised includes the cost of materials, direct labour and overhead costs
that are directly attributable to preparing the asset for its intended use. For qualifying
assets, borrowing costs are capitalised in accordance with the accounting policy on
borrowing costs. Other development expenditure is recognised in profit or loss as incurred.
Capitalised development expenditure is measured at cost less any accumulated amortisation
and any accumulated impairment losses.
(iii)
Other intangible assets
Intangible assets, other than goodwill, that are acquired by the Group, which have finite
useful lives, are measured at cost less any accumulated amortisation and any accumulated
impairment losses.
The fair value of patents and trademarks acquired in a business combination is based on the
discounted estimated royalty payments that have been avoided as a result of the patent or
trademark being owned. The fair value of other intangible assets is based on the discounted
cash flows expected to be derived from the use and eventual sale of the assets.
83
2.
(f)
Intangible assets (continued)
(iv)
Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits
embodied in the specific asset to which it relates. All other expenditure, including
expenditure on internally generated goodwill and brands, is recognised in profit or loss as
incurred.
(v)
Amortisation
Amortisation is based on the cost of an asset less its residual value.
Goodwill and intangible assets with indefinite useful lives are not amortised but are tested
for impairment annually and whenever there is an indication that they may be impaired.
Other intangible assets are amortised from the date that they are available for use.
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful
lives of intangible assets from the date that they are available for use.
Amortisation method, useful lives and residual values are reviewed at the end of each
reporting period and adjusted, if appropriate.
(g)
Biological assets
New planting expenditure incurred on land clearing to the point of harvesting is capitalised at cost
as biological assets.
Expenditure on new planting and replanting and upkeep of immature areas are amortised over the
estimated economic useful lives of the trees. Amortisation is deferred until the planted areas attain
maturity and the rate used is 5% per annum.
(h)
Land held for property development consist of land where no development activities have been
carried out or where development activities are not expected to be completed within the normal
operating cycle of 2 to 3 years. Such land is classified within non-current assets and is stated at
cost less any accumulated impairment losses, if any.
Land held for property development is reclassified as property development costs at the point
when development activities have commenced and where it can be demonstrated that the
development activities can be completed within the normal operating cycle.
Cost associated with the acquisition of land includes the purchase price of the land, professional
fees, stamp duties, commissions, conversion fees and other relevant levies.
84
2.
(i)
(i)
Investment property carried at cost
Investment properties are properties which are owned to earn rental income or for capital
appreciation or for both. These include freehold land and leasehold land which in substance
is a finance lease held for a currently undetermined future use. Properties that are occupied
by the companies in the Group are accounted for as owner-occupied rather than as
investment properties. Investment properties initially and subsequently measured at cost are
accounted for similarly to property, plant and equipment.
Investment properties are stated at cost less any accumulated depreciation and any
accumulated impairment losses, consistent with the accounting policy for property, plant
and equipment as stated in accounting policy Note 2(d).
Transfers between investment property, property, plant and equipment and inventories do
not change the carrying amount and the cost of the property transferred.
Depreciation is charged to profit or loss on a straight-line basis over the estimated useful
lives of 50 years for buildings. Freehold land is not depreciated.
On disposal of an investment property, or when it is permanently withdrawn from use and
no future economic benefits are expected from its disposal, it shall be derecognised
(eliminated from the statement of financial position). The difference between the net
disposal proceeds and the carrying amount is recognised in profit or loss in the period of the
retirement or disposal.
(ii)
Determination of fair value
The fair values are based on market values, being the estimated amount for which a
property could be exchanged on the date of the valuation between a willing buyer and a
willing seller in an arm’s length transaction after proper marketing wherein the parties had
each acted knowledgeably, prudently and without compulsion.
(j)
Property development costs comprise costs associated with the acquisition of land and all costs
that are directly attributable to development activities or that can be allocated on a reasonable
basis to such activities.
Any expected loss on a development project, including costs to be incurred over the defects
liability period, is recognised as an expense immediately.
Property development costs not recognised as an expense is recognised as an asset and is stated at
the lower of cost and net realisable value.
(k)
Inventories
(i)
Completed development properties
Completed development properties are stated at the lower of cost and net realisable value.
Cost is determined on a specific identification basis and includes land, all direct building
costs and appropriate proportions of common costs attributable to developing the properties
to completion.
85
2.
(k)
Inventories (continued)
(ii)
Other inventories
Inventories are measured at the lower of cost and net realisable value. The cost of
inventories is measured based on the first-in, first-out principle and includes expenditure
incurred in acquiring the inventories, production or conversion costs and other costs
incurred in bringing them to their existing location and condition. In the case of work-inprogress and finished goods, cost includes an appropriate share of production overheads
based on normal operating capacity.
Cost of assembled motor vehicles and knocked-down units is determined on specific
identification and cost of other inventories is principally determined on a first-in, first-out
basis.
Net realisable value is the estimated selling price in the ordinary course of business, less the
estimated costs of completion and the estimated costs necessary to make the sale.
The fair value of inventories acquired in a business combination is determined based on its
estimated selling price in the ordinary course of business less the estimated costs of completion
and sale, and a reasonable profit margin based on the effort required to complete and sell the
inventories.
(l)
Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly
liquid investments which have an insignificant risk of changes in fair value with original
maturities of three months or less, and are used by the Group and the Company in the management
of their short term commitments. For the purpose of the statement of cash flows, cash and cash
equivalents are presented net of bank overdrafts and pledged deposits.
(m) Equity instruments
Instruments classified as equity are measured at cost on initial recognition and are not remeasured
subsequently.
(i)
Issue expenses
Costs directly attributable to issue of instruments classified as equity are recognised as a
deduction from equity.
(ii)
Ordinary Stocks
Ordinary stocks are classified as equity.
86
2.
(m) Equity instruments (continued)
(iii) Repurchase, disposal and reissue of share capital
When share capital recognised as equity is repurchased, the amount of the consideration
paid, including directly attributable costs, net of any tax effects, is recognised as a
deduction from equity. Repurchased shares that are not subsequently cancelled are
classified as treasury shares in the statement of changes in equity.
When treasury shares are distributed as share dividends, the cost of the treasury shares is
applied in the reduction of the share premium account or distributable reserves, or both.
When treasury shares are sold or reissued subsequently, the difference between the sales
consideration net of directly attributable costs and the carrying amount of the treasury
shares is recognised in equity, and the resulting surplus or deficit on the transaction is
presented in share premium.
(n)
Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or
constructive obligation that can be estimated reliably, and it is probable that an outflow of
economic benefits will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. The unwinding of the
discount is recognised as finance cost.
(i)
Warranties
A provision for warranties is recognised when the underlying products or services are sold.
The provision is based on historical warranty data and a weighting of all possible outcomes
against their associated probabilities.
(ii)
Onerous contracts
A provision for onerous contracts is recognised when the expected benefits to be derived by
the Group from a contract are lower than the unavoidable cost of meeting its obligations
under the contract. The provision is measured at the present value of the lower of the
expected cost of terminating the contract and the expected net cost of continuing with the
contract. Before a provision is established, the Group recognises any impairment loss on
the assets associated with that contract.
(o)
Contingencies
(i)
Contingent liabilities
Where it is not probable that an outflow of economic benefits will be required, or the
amount cannot be estimated reliably, the obligation is not recognised in the statements of
financial position and is disclosed as a contingent liability, unless the probability of outflow
of economic benefits is remote. Possible obligations, whose existence will only be
confirmed by the occurrence or non-occurrence of one or more future events, are also
disclosed as contingent liabilities unless the probability of outflow of economic benefits is
remote.
87
2.
(o)
Contingencies (continued)
(ii)
Contingent assets
Where it is not possible that there is an inflow of economic benefits, or the amount cannot
be estimated reliably, the asset is not recognised in the statements of financial position and
is disclosed as a contingent asset, unless the probability of inflow of economic benefits is
remote. Possible obligations, whose existence will only be confirmed by the occurrence or
non-occurrence of one or more future events, are also disclosed as contingent assets unless
the probability of inflow of economic benefits is remote.
(p) Impairment
(i)
Financial assets
All financial assets (except for financial assets categorised as fair value through profit or
loss, investments in subsidiaries and associates) are assessed at each reporting date whether
there is any objective evidence of impairment as a result of one or more events having an
impact on the estimated future cash flows of the asset. Losses expected as a result of future
events, no matter how likely, are not recognised. For an investment in an equity instrument,
a significant or prolonged decline in the fair value below its cost is an objective evidence of
impairment. If any such objective evidence exists, then the financial asset’s recoverable
amount is estimated.
An impairment loss in respect of loans and receivables and held-to-maturity investments is
recognised in profit or loss and is measured as the difference between the asset’s carrying
amount and the present value of estimated future cash flows discounted at the asset’s
original effective interest rate. The carrying amount of the asset is reduced through the use
of an allowance account.
An impairment loss in respect of available-for-sale financial assets is recognised in profit or
loss and is measured as the difference between the asset’s acquisition cost (net of any
principal repayment and amortisation) and the asset’s current fair value, less any
impairment loss previously recognised. Where a decline in the fair value of an availablefor-sale financial asset has been recognised in the other comprehensive income, the
cumulative loss in other comprehensive income is reclassified from equity to profit or loss.
An impairment loss in respect of unquoted equity instrument that is carried at cost is
recognised in profit or loss and is measured as the difference between the financial asset’s
carrying amount and the present value of estimated future cash flows discounted at the
current market rate of return for a similar financial asset.
Impairment losses recognised in profit or loss for an investment in an equity instrument
classified as available-for-sale is not reversed through profit or loss.
If, in a subsequent period, the fair value of a debt instrument increases and the increase can
be objectively related to an event occurring after the impairment loss was recognised in
profit or loss, the impairment loss is reversed, to the extent that the asset’s carrying amount
does not exceed what the carrying amount would have been had the impairment not been
recognised at the date the impairment is reversed. The amount of the reversal is recognised
in profit or loss.
88
2.
(p)
Impairment (continued)
(ii)
Other assets
The carrying amounts of other assets (except for inventories, property development costs
and deferred tax asset) are reviewed at the end of each reporting period to determine
whether there is any indication of impairment. If any such indication exists, then the asset’s
recoverable amount is estimated. For goodwill, and intangible assets that have indefinite
useful lives or that are not yet available for use, the recoverable amount is estimated each
period at the same time.
For the purpose of impairment testing, assets are grouped together into the smallest group
of assets that generates cash inflows from continuing use that are largely independent of the
cash inflows of other assets or cash-generating units. Subject to an operating segment
ceiling test, for the purpose of goodwill impairment testing, cash-generating units to which
goodwill has been allocated are aggregated so that the level at which impairment testing is
performed reflects the lowest level at which goodwill is monitored for internal reporting
purposes. The goodwill acquired in a business combination, for the purpose of impairment
testing, is allocated to group of cash-generating units that are expected to benefit from the
synergies of the combination.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use
and its fair value less costs to sell. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset or cashgenerating unit.
An impairment loss is recognised if the carrying amount of an asset or its related cashgenerating unit exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect
of cash-generating units are allocated first to reduce the carrying amount of any goodwill
allocated to the cash-generating unit (groups of cash-generating units) and then to reduce
the carrying amount of the other assets in the cash-generating unit (groups of cashgenerating units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets,
impairment losses recognised in prior periods are assessed at the end of each reporting
period for any indications that the loss has decreased or no longer exists. An impairment
loss is reversed if there has been a change in the estimates used to determine the recoverable
amount since the last impairment loss was recognised. An impairment loss is reversed only
to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if no impairment loss had
been recognised. Reversals of impairment losses are credited to profit or loss in the
financial year in which the reversals are recognised.
89
2.
(q)
Employee benefits
(i)
Short-term employee benefits
Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual
leave and sick leave are measured on an undiscounted basis and are expensed as the related
service is provided.
A liability is recognised for the amount expected to be paid under short term cash bonus or
profit-sharing plans if the Group has a present legal or constructive obligation to pay this
amount as a result of past service provided by the employee and the obligation can be
estimated reliably.
(ii)
State plans
The Group’s contributions to statutory pension funds are charged to profit or loss in the
financial year to which they relate. Once the contributions have been paid, the Group has no
further payment obligations.
(iii)
Termination benefits
Termination benefits are recognised as an expense when the Group is committed
demonstrably, without realistic possibility of withdrawal, to a formal detailed plan to either
terminate employment before the normal retirement date, or to provide termination benefits
as a result of an offer made to encourage voluntary redundancy. Termination benefits for
voluntary redundancies are recognised as expenses if the Group has made an offer
encouraging voluntary redundancy, it is probable that the offer will be accepted, and the
number of acceptances can be estimated reliably. If benefits are payable more than 12
months after the reporting period, then they are discounted to their present value.
(r)
Deferred income
(i)
Extended warranty package income
Extended warranty package income received and receivable are taken to the deferred
income account and are recognised as revenue when services are provided. Upon the expiry
of the extended warranty package, any unutilised value of the extended warranty package is
taken to profit or loss.
(ii)
Service package income
Service package income received and receivable are taken to the deferred income account
and are recognised as revenue when services are provided. Upon the expiry of the service
package, any unutilised value of the service package is taken to profit or loss.
90
2.
(s)
Revenue and other income
(i)
Goods sold
Revenue from the sale of goods in the course of ordinary activities is measured at fair value
of the consideration received or receivable, net of returns and allowances, trade discount
and volume rebates. Revenue is recognised when persuasive evidence exists, usually in the
form of an executed sales agreement, that the significant risks and rewards of ownership
have been transferred to the customer, recovery of the consideration is probable, the
associated costs and possible return of goods can be estimated reliably, and there is no
continuing management involvement with the goods, and the amount of revenue can be
measured reliably. If it is probable that discounts will be granted and the amount can be
measured reliably, then the discount is recognised as a reduction of revenue as the sales are
recognised.
(ii)
Services
Revenue from services rendered is recognised in profit or loss in proportion to the stage of
completion of the transaction at the end of the reporting period. The stage of completion is
assessed by reference to surveys of work performed.
(iii) Property development
Revenue from property development activities is recognised based on the stage of
completion measured by reference to the proportion that property development costs
incurred for work performed to date bear to the estimated property development costs.
Where the financial outcome of a property development activities cannot be reliably
estimated, property development revenue is recognised only to the extent of property
development costs incurred that is probable will be recoverable, and property development
costs on the development units sold are recognised as an expense in the period in which
they are incurred.
Any expected loss on a development project, including costs to be incurred over the defects
liability period, is recognised immediately in profit or loss.
(iv)
Developed properties
Revenue relating to sale of developed properties is recognised net of discounts when risks
and rewards have been transferred.
(v)
Rental income
Rental income is recognised in profit or loss on a straight-line basis over the term of the
lease. Lease incentives granted are recognised as an integral part of the total rental income,
over the term of the lease.
(vi)
Dividend income
Dividend income is recognised in profit or loss on the date that the Group’s or the
Company’s right to receive payment is established, which in the case of quoted securities is
the ex-dividend date.
91
2.
(s)
Revenue and other income (continued)
(vii) Commission
When the Group acts in the capacity of an agent rather than as the principal in a transaction,
the revenue recognised is the net amount of commission made by the Group.
(viii) Interest income
Interest income is recognised as it accrues, using the effective interest method in profit or
loss except for interest income arising from temporary investment of borrowings taken
specifically for the purpose of obtaining a qualifying asset which is accounted for in
accordance with the accounting policy on borrowing costs.
(t)
Borrowing costs
Borrowing costs that are not directly attributable to the acquisition, construction or production of a
qualifying asset are recognised in profit or loss using the effective interest method.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their
intended use or sale, are capitalised as part of the cost of those assets.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when
expenditure for the asset is being incurred, borrowing costs are being incurred and activities that
are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of
borrowing costs is suspended or ceases when substantially all the activities necessary to prepare
the qualifying asset for its intended use or sale are interrupted or completed.
Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
(u)
Income tax
Income tax expense comprises current and deferred tax. Current tax and deferred tax are
recognised in profit or loss except to the extent that it relates to a business combination or items
recognised directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year,
using tax rates enacted or substantively enacted by the end of the reporting period, and any
adjustment to tax payable in respect of previous financial years.
Deferred tax is recognised using the liability method, providing for temporary differences between
the carrying amounts of assets and liabilities in the statement of financial position and their tax
bases. Deferred tax is not recognised for the following temporary differences: the initial
recognition of goodwill, and the initial recognition of assets or liabilities in a transaction that is not
a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax
is measured at the tax rates that are expected to be applied to the temporary differences when they
reverse, based on the laws that have been enacted or substantively enacted by the end of the
reporting period.
The amount of deferred tax recognised is measured based on the expected manner of realisation or
settlement of the carrying amount of the assets and liabilities, using tax rates enacted or
substantively enacted at the reporting date. Deferred tax assets and liabilities are not discounted.
92
2.
(u)
Income tax (continued)
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current
tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the
same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and
assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be
available against which the temporary difference can be utilised. Deferred tax assets are reviewed
at the end of each reporting period and are reduced to the extent that it is no longer probable that
the related tax benefit will be realised.
A tax incentive that is not a tax base of an asset is recognised as a reduction of tax expense in
profit or loss as and when it is granted and claimed. Any unutilised portion of the tax incentive is
recognised as a deferred tax asset to the extent that it is probable that future taxable profits will be
available against which the unutilised tax incentive can be utilised.
(v)
Earnings per ordinary stock
The Group presents basic earnings per stock data for its ordinary stocks (EPS).
Basic EPS is calculated by dividing the profit or loss attributable to ordinary stockholders of the
Company by the weighted average number of ordinary shares outstanding during the period,
adjusted for own shares held.
(w) Operating segments
An operating segment is a component of the Group that engages in business activities from which
it may earn revenues and incur expenses, including revenues and expenses that relate to
transactions with any of the Group’s other components. An operating segment’s operating results
are reviewed regularly by the chief operating decision maker, which in this case are the Chairman
and Managing Directors of the Group, to make decisions about resources to be allocated to the
segment and to assess its performance, and for which discrete financial information is available.
(x)
Discontinued operations
A discontinued operation is a component of the Group’s business that represents a separate major
line of business or geographical area of operations that has been disposed of or is held for sale or
distribution, or is a subsidiary acquired exclusively with a view to resale. Classification as a
discontinued operation occurs upon disposal or when the operation meets the criteria to be
classified as held for sale, if earlier. When an operation is classified as a discontinued operation,
the comparative statement of profit or loss and other comprehensive income is re-presented as if
the operation had been discontinued from the start of the comparative period.
93
3.
At 31 December
Group
Cost/
Valuation
RM’000
Accumulated
depreciation
RM’000
Accumulated
impairment loss
RM’000
Net book
value
RM’000
3,732
231,700
-
-
3,732
231,700
1,187
255
95,224
819
145
41,321
-
368
110
53,903
2,054
13,075
895
2,984
-
1,159
10,091
2,037
260
1,170,453
2,037
103
381,765
-
157
788,688
667,043
546,228
5,940
114,875
260,414
72,595
199,419
-
60
-
60,935
72,595
2,520,029
1,175,716
6,000
1,338,313
2012
Freehold land :
At valuation
- 1978
At cost
Short term leasehold land
At valuation
- 1976
- 1978
At cost
Long term leasehold land
At valuation
- 1978
At cost
Buildings :
At valuation
- 1976
- 1978
At cost
Other assets at cost :
Plant and machinery
Furniture, fixtures, fittings, equipment
and vehicles
Capital work-in-progress
94
3.
At 31 December
Cost/
Valuation
RM’000
Accumulated
depreciation
RM’000
Accumulated
impairment loss
RM’000
Net book
value
RM’000
3,732
214,862
-
-
3,732
214,862
At valuation
- 1976
- 1978
At cost
1,187
255
92,962
819
139
38,164
-
368
116
54,798
At valuation
- 1978
At cost
2,054
13,075
882
2,810
-
1,172
10,265
2,037
260
916,081
2,037
103
355,457
-
157
560,624
649,107
515,154
5,940
128,013
245,644
90,765
192,601
-
60
-
52,983
90,765
2,232,021
1,108,166
6,000
1,117,855
Group
2011
Freehold land :
At valuation - 1978
At cost
Buildings :
At valuation
- 1976
- 1978
At cost
Plant and machinery
Furniture, fixtures, fittings,
equipment and vehicles
95
3.
At 31 December
Cost/
Valuation
RM’000
Accumulated
depreciation
RM’000
Net book
value
RM’000
Company
2012
Freehold land :
At cost
289
-
289
784
504
280
1,073
504
569
289
-
289
774
400
374
1,063
400
663
2011
Freehold land :
At cost
Please refer Notes 3.1 and 3.2 for detailed movement of cost/valuation and accumulated depreciation of
property, plant and equipment of the Group and of the Company.
96
3.
3.1 Detailed movements in cost/valuation of the Group are as follows :At
1 January
2012
RM’000
At valuation 1978 :
Freehold land
Buildings
At valuation 1976 :
Buildings
Group
Reclassification
RM’000
Transfer from
investment
properties
RM’000
Transfer to
biological
assets
RM’000
Exchange
differences
RM’000
At 31
December
2012
RM’000
-
-
-
-
-
3,732
255
2,054
260
-
-
-
-
-
2,037
1,187
(759)
(6,825)
15,068
36,136
6,251
1,379
5,008
-
-
29,016
42,456
(13,743)
(1,127)
70
(57,525)
315,749
(22,454)
Additions
RM’000
Disposal/
Write-off
RM’000
3,732
255
2,054
260
-
2,037
1,187
-
214,862
92,962
13,075
916,081
649,107
772
217,460
26,045
245,644
90,765
2,232,021
At cost :
Freehold land
Buildings
Plant and machinery
97
-
(381)
2,262
(3,473)
(7,535)
231,700
95,224
13,075
1,170,453
667,043
-
(117)
-
(456)
(1,974)
260,414
72,595
6,387
Note 8
(117)
Note 5
(11,557)
2,520,029
3.
3.1 Detailed movements in cost/valuation of the Group are as follows :-
At
1 January
2011
RM’000
Additions
RM’000
Additions
through
acquisition
of
subsidiaries
RM’000
At valuation 1978 :
Freehold land
Buildings
Assembly plant
11,558
255
2,054
337
1,370
-
-
-
-
At valuation 1976 :
Buildings
2,037
1,374
-
-
-
-
154,760
91,039
130,636
1,011,390
3,460
637,389
2,350
14,279
61,810
74,382
3,209
(17,092)
(30,436)
(48,296)
256,247
57,219
18,334
60,184
1,844
1,386
(14,591)
(4,697)
2,361,125
95,147
142,631
(115,112)
Group
Disposal/
Writeoff
RM’000
Deletion
through
liquidation
of a
subsidiary
RM’000
Reclassification
RM’000
Transfer
from
property
development
costs
RM’000
-
-
(187)
-
75,389
187
(70,663)
37,299
8,507
-
(19,015)
(23,010)
-
Transfer to
investment
properties
RM’000
(7,826)
(77)
(1,370)
-
Exchange
differences
RM’000
At
31
December
2011
RM’000
-
3,732
255
2,054
260
-
-
2,037
1,187
1,962
1,736
22,888
6,050
214,862
92,962
13,075
916,081
649,107
At cost :
Freehold land
Buildings
Assembly plant
Plant and machinery
(823)
(823)
98
-
8,507
Note 13
(61,967)
(117,561)
(102,337)
(3,460)
(294,598)
Note 8
2,825
(317)
35,144
245,644
90,765
2,232,021
3.
3.1 Detailed movements in cost/valuation of the Company are as follows :-
Company
At valuation 1978 :
Freehold land
At cost :
Freehold land
Company
At valuation 1978 :
Freehold land
At cost :
Freehold land
Buildings
Additions
RM’000
Disposal/
Write-off
RM’000
Transfer to
investment
properties
RM’000
At
31 December
2012
RM’000
-
-
-
-
-
289
-
-
-
289
774
-
10
-
-
-
784
-
1,063
10
-
-
1,073
At
1 January 2011
RM’000
Additions
RM’000
Disposal/
Write-off
RM’000
Transfer to
investment
properties
RM’000
At
31 December
2011
RM’000
10,368
-
-
(10,368)
-
1,049
175
-
-
(760)
(175)
289
-
569
28
337
-
(132)
(28)
12,189
337
(160)
At 1 January
2012
RM’000
99
(11,303)
774
1,063
3.
3.2 Detailed movements in accumulated depreciation and accumulated impairment losses of the Group are as follows :At
1 January
2012
RM’000
Depreciation
for the year
RM’000
Disposal/
Write-off
RM’000
At valuation 1978 :
Buildings
103
139
882
6
13
-
At valuation 1976 :
Buildings
2,037
819
13
-
38,164
2,810
355,457
515,154
2,237
174
26,317
43,247
192,601
Group
Reclassification
RM’000
Transfer from
investment
properties
RM’000
Exchange
differences
RM’000
At
31 December
2012
RM’000
-
-
-
103
145
895
(13)
-
-
2,037
819
(714)
(5,824)
13
195
(172)
1,217
-
18,912
(12,482)
(23)
-
1,108,166
90,919
(19,020)
5,940
-
60
Accumulated depreciation
At cost :
Buildings
Plant and machinery
907
(707)
(6,177)
411
(5,566)
41,321
2,984
381,765
546,228
199,419
-
1,217
1,175,716
-
-
-
-
5,940
-
-
-
-
-
60
6,000
-
-
-
-
-
6,000
1,114,166
90,919
Note 22
-
1,217
Note 8
Accumulated impairment losses
At cost :
Buildings
Plant and machinery
(19,020)
100
(5,566)
1,181,716
3.
3.2 Detailed movements in accumulated depreciation and accumulated impairment losses of the Group are as follows :-
Depreciation
for the year
RM’000
(Reversal of)/
Impairment
loss for the
year
RM’000
Disposal/
Write-off
RM’000
Deletion
through
liquidation of
a subsidiary
RM’000
Reclassification
RM’000
164
1,370
133
857
3
6
25
-
-
-
-
2,037
965
-
-
-
-
35,017
5,719
361,755
3,437
490,966
2,360
144
27,069
42,885
-
(6,934)
(42,139)
206,693
16,559
-
(13,753)
1,109,113
89,051
-
(62,826)
440
10,300
-
60
-
10,800
-
(4,800)
1,119,913
89,051
Note 22
(4,800)
Note 22
At
1 January
2011
RM’000
At valuation 1978 :
Buildings
Assembly plant
At valuation 1976 :
Buildings
Group
Transfer to
investment
properties
RM’000
Exchange
differences
RM’000
At
31 December
2011
RM’000
-
103
139
882
-
2,037
819
641
8,016
5,114
38,164
2,810
355,457
515,154
2,161
192,601
15,932
1,108,166
At cost :
Buildings
Assembly plant
Plant and machinery
(755)
(755)
(146)
146
(24)
19,083
(19,059)
-
(64)
(1,370)
(3,053)
(34,425)
(3,437)
(42,349)
Accumulated impairment losses
At cost :
Buildings
Plant and machinery
(440)
(4,360)
-
-
-
-
-
-
5,940
-
-
-
-
-
60
-
-
-
-
-
6,000
15,932
1,114,166
(62,826)
101
(755)
-
(42,349)
Note 8
3.
3.2 Detailed movements in accumulated depreciation of the Company are as follows :-
Company
At
1 January
2012
RM’000
Depreciation
for the year
RM’000
Disposal/
Write-off
RM’000
Transfer to
investment
properties
RM’000
At
31 December
2012
RM’000
400
104
-
-
504
400
104
-
Note 8
504
At
1 January
2011
RM’000
Depreciation
for the year
RM’000
Disposal/
Write-off
RM’000
Transfer to
investment
properties
RM’000
At
31 December
2011
RM’000
56
-
-
434
85
(119)
-
400
490
85
(119)
(56)
400
At cost :
Company
At cost :
Buildings
102
(56)
-
3.
The property, plant and equipment are shown at Directors' valuation in the years indicated based on the
following valuation exercises carried out :
In 1976 - By a firm of professional valuers on a ‘replacement cost’ basis.
In 1978 - By Government Valuers on an ‘open market value’ basis.
Subsequent acquisitions are shown at cost while deletions are at valuation or cost as appropriate.
3.3
Assets under hire purchase and leasing arrangements
Included in the net book value of property, plant and equipment of the Group is an amount of
RM5,234,000 (2011 : RM2,128,000) representing assets financed under leasing instalment plans.
3.4
Security
Certain freehold land of the Group with net book value of RM19,597,000 (2011 : RM19,597,000)
are pledged to a licensed bank as security for banking facilities granted to a subsidiary of the
Company (see Note 18).
3.5
Carrying amounts of revalued property, plant and equipment
The carrying amounts of the revalued assets (under property, plant and equipment) had they been
stated at cost less accumulated depreciation are as follows :
2012
Cost
RM’000
Accumulated
depreciation
RM’000
Net book
value
RM’000
187
1,713
144
1,395
43
318
1,900
1,539
361
1,022
23
1,400
285
20
657
143
1,022
3
743
142
2,730
820
1,910
4,630
2,359
2,271
At Valuation 1976 :
Held by the subsidiaries of the Group
Buildings
At Valuation 1978 :
Freehold land
Buildings
103
3.
3.5
Carrying amounts of revalued property, plant and equipment (continued)
Cost
RM’000
Accumulated
depreciation
RM’000
Net book
value
RM’000
187
1,713
140
1,370
47
343
1,900
1,510
390
1,022
23
1,400
285
19
652
140
1,022
4
748
145
2,730
811
1,919
4,630
2,321
2,309
2011
At Valuation 1976 :
Buildings
At Valuation 1978 :
Freehold land
Buildings
104
4.
Intangible assets - Group
Developmen
t cost
RM’000
Total
RM’000
31,866
35,580
(11,413)
1,529
961
-
33,395
35,580
961
(11,413)
56,033
2,490
58,523
(5,359)
303
-
303
(5,359)
50,674
2,793
53,467
-
1,100
162
1,100
162
-
1,262
1,262
-
182
182
-
1,444
1,444
At 1 January 2011
31,866
429
32,295
At 31 December 2011/1 January 2012
56,033
1,228
57,261
At 31 December 2012
50,674
1,349
52,023
Note
Goodwill
RM’000
Cost
At 1 January 2011
Arising from acquisition of subsidiaries
Additions during the year
Impairment loss
At 31 December 2011
Impairment loss
22
At 31 December 2012
Amortisation
At 1 January 2011
Amortisation during the year
22
At 31 December 2011
Amortisation during the year
22
At 31 December 2012
Carrying amounts
Goodwill acquired in a business combination is allocated, at acquisition, to the cash-generating unit
(“CGU”) that is expected to benefit from that business combination. The carrying amount of goodwill
had been allocated to the following business segments as independent CGUs :
Group
Automotive and related products
Plastic products
Plantation
Hotel and resorts
Multiple units without significant goodwill
105
2012
RM’000
2011
RM’000
1,172
4,068
42,303
1,004
2,127
5,152
4,159
42,303
1,004
3,415
50,674
56,033
4.
Intangible assets - Group (continued)
(a)
Key sources of estimation uncertainty
The Group determines whether goodwill is impaired at least on an annual basis. This requires an
estimation of the value in use of the cash-generating units to which the goodwill is allocated.
Estimating the value in use requires the Group to make an estimate of the expected future cash
flows from the cash-generating unit and also to apply a suitable discount rate in order to calculate
the present value of those cash flows. The carrying amount of the Group’s goodwill as at
31 December 2012 was approximately RM50,674,000 (2011 : RM56,033,000).
(b)
Recoverable amount based on value in use
The recoverable amount of a CGU is determined based on the value in use calculations with the
following key assumptions applied :
(i)
Cash flows are projected based on the financial budgets approved by the Directors.
(ii)
Discount rates used for cash flows discounting purposes are the management’s estimate of
average cost of capital required in the respective segments. The discount rates applied for
cash flow projections are ranging from 5% to 10%.
(iii)
Growth rate for the plantation segment is determined based on the management’s estimate
of commodity prices, palm yields, oil extractions rates and also cost of productions whilst
growth rates of other segments are determined based on the industry trends and past
performance of the segments.
(iv)
Profit margins are projected based on the industry trends, historical profit margin achieved
or predetermined profit margin for property projects.
With regard to the assessment of value in use, management believes that no reasonably possible
change in any of the above key assumptions would cause the recoverable amounts of the units to
be materially below their carrying amounts.
5.
Biological assets - Group
Cost
2012
RM’000
2011
RM’000
Balance at 1 January
Effect of movement in exchange rate
Transfer from prepaid land lease payments (Note 7)
Transfer from property, plant and equipment (Note 3)
Written off
287,718
76,709
(26,340)
117
(1,542)
245,313
31,911
3,455
7,315
(276)
Balance at 31 December
336,662
287,718
Amortisation charge for the year (Note 22)
Effect of movement in exchange rate
Written off
121,523
11,728
(9,382)
(1,349)
108,180
12,217
1,402
(276)
Balance at 31 December
122,520
121,523
214,142
166,195
Accumulated amortisation
106
5.
Biological assets – Group (continued)
Additions to biological assets during the year include :
- Interest expense
2012
RM’000
2011
RM’000
1,672
161
Interest is capitalised under biological assets at an average rate of 0.81% to 6.75% (2011 : 0.75% to
1.80%) per annum.
6.
Land held for property development - Group
2012
RM’000
2011
RM’000
Add : Additions during the year
Less : Transfer to investment properties (Note 8)
37,750
396
(2,323)
167,546
35,246
(165,042)
Balance at 31 December *
35,823
37,750
467
1,166
33,552
1,804
35,082
1,502
35,823
37,750
* This amount comprises :
At valuation (1978)
Freehold land
At cost
Freehold land
Other outgoings
6.1
Land held for property development under the revaluation model
The freehold land is shown at Directors’ valuation based on a valuation exercise carried out by
Government Valuers on an ‘open market value’ basis in 1978.
The carrying amount of the revalued land had it been stated at cost is RM194,000 (2011 :
RM927,000).
107
7.
Prepaid land lease payments - Group
Note
2012
RM’000
2011
RM’000
40,521
(278)
(260)
52,450
810
(414)
(7,315)
(5,675)
665
At 31 December
39,983
40,521
31,653
8,330
31,738
8,783
39,983
40,521
At 1 January
Additions
Amortisation for the year
Transfer to biological assets
Disposal
Exchange differences
8.
22
5
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
Cost
At 1 January
Transfer (to)/from property, plant
and equipment (Note 3)
Transfer from land held for property
development (Note 6)
Additions
537,657
78,017
15,137
3,834
(6,387)
294,598
-
11,303
2,323
11,594
(684)
165,042
-
-
-
At 31 December
544,503
537,657
15,137
15,137
At 1 January
Charge for the year (Note 22)
Transfer (to)/from property, plant and
equipment (Note 3)
49,738
3,451
5,371
2,018
60
4
4
(1,217)
41
42,349
-
-
56
-
At 31 December
52,013
49,738
64
60
492,490
487,919
15,073
15,077
133,148
89,622
269,695
25
132,424
85,797
269,675
23
14,962
111
-
14,962
115
-
492,490
487,919
15,073
15,077
Carrying amount
At 31 December
Included in the above are :
Freehold land
Buildings
Assembly plant
108
8.
Investment properties (continued)
Investment properties comprise a number of commercial properties, vacant land and assembly plant that
are leased to third parties or held for capital appreciation. Some of these properties of the Group were
transferred to/from property, plant and equipment and land held for property development following the
changes in the use of these properties.
As at 31 December 2012, the fair values of all investment properties are determined based on market
values except for properties with carrying amount of RM58,637,000 (2011: RM56,326,000) where the
fair values are determined based on the value in use by discounting the future cash flows to be generated
from the rental of the building.
The fair values of the investment properties are as follows :
Group
At fair value
9.
Company
2012
RM
million
2011
RM
million
2012
RM
million
2011
RM
million
1,640.9
1,586.9
224.4
224.4
Investments in subsidiaries
Note
Unquoted shares, at cost
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
24,307
24,307
621,524
461,612
(47,174)
(47,174)
(36,085)
-
(36,085)
-
(22,867)
(22,867)
585,439
425,527
Less :
Impairment losses
Share of post-acquisition reserves
9.1
Details of the subsidiaries are listed under Note 36.
9.1
Investment in a non-consolidated subsidiary - Group
The Group’s interest in a non-consolidated subsidiary represents the interests of the Group’s
investment in PT Oriental Kyowa Industries (“PT OKI”). PT OKI is a 45% and 55% owned
subsidiary held through Jutajati Sdn. Bhd. and Selasih Permata Sdn. Bhd. respectively.
On 23 February 2010, the shareholders of PT OKI commenced liquidation proceedings on PT OKI.
Accordingly, the financial statements of PT OKI have been de-consolidated in the Group’s financial
statements thereafter. In November 2011, the shareholders of PT OKI had applied for cancellation of
liquidation proceedings for which the approval was still pending from the local authority at year end.
109
10. Investments in associates
Group
2012
2011
RM’000
RM’000
Unquoted shares, at cost
Share of post-acquisition reserves
Company
2012
2011
RM’000
RM’000
81,391
314,598
81,307
253,215
28,291
-
27,316
-
395,989
334,522
28,291
27,316
391,610
4,379
330,143
4,379
395,989
334,522
* This is represented by :
Share of net assets
Goodwill
List of associates :
Group’s effective
interest
2012
2011
%
%
Incorporated in Malaysia :
50.0
33.4
39.8
39.5
50.0
33.4
39.8
39.5
Penang Amusements Co. Sdn. Bhd.
Honda Autoparts Manufacturing (M) Sdn.
Bhd.
Hicom Teck See Manufacturing
Malaysia Sdn Bhd
Hitachi Construction Machinery (Malaysia)
Sdn. Bhd.
25.0
49.0
25.0
49.0
29.4
29.4
30.0
30.0
49.0
50.0
110
Investment holding
Property development
Production and sale of oil palm
fruits, palm oil and kernel
Operation of a bowling alley
Manufacture and sale of motor
vehicle parts
Manufacture of thermo plastic
and thermo setting products
Sale of construction machinery,
attachments and spare parts
and renting of machinery
Manufacture, assembly and sale
of motorcycles
10. Investments in associates (continued)
List of associates (continued):
Group’s effective
interest
2012
2011
%
%
Incorporated in Singapore :
Singapore Safety Driving Centre Ltd
B.S. Kah Pte. Ltd
Bukit Batok Driving Centre Ltd
27.5
40.0
21.9
27.5
40.0
21.9
Operation of a driving school
Property management
Operation of a driving school
15.0
15.0
Manufacture and sale of parts,
mould and automotive
equipment including
automotive interior parts
38.9
38.9
Manufacture and distribution of
plastic articles and products
in automotive and electrical
sectors
Incorporated in Thailand :
Held through a subsidiary of the Company,
Teck See Plastic Sdn Bhd
Incorporated in the Republic of Indonesia :
Held through subsidiaries of the Company, Teck
See Plastic Sdn Bhd and Oriental International
(Mauritius) Pte Ltd
P.T. Oriental Manufacturing Indonesia
The accounting year end of all the associates is 31 December except for Hicom Teck See Manufacturing
Malaysia Sdn Bhd, Honda Autoparts Manufacturing (M) Sdn. Bhd., Hitachi Construction Machinery
(Malaysia) Sdn. Bhd. and Boon Siew Honda Sdn. Bhd. whose accounting years end on 31 March.
111
10. Investments in associates (continued)
Summary financial information on associates :
Revenues
(100%)
RM’000
Profit/(Loss)
for the year
(100%)
RM’000
Total
assets
(100%)
RM’000
Total
liabilities
(100%)
RM’000
Group
2012
Hicom Teck See Manufacturing Malaysia Sdn.
Bhd.
Sdn. Bhd.
B.S. Kah Pte. Ltd
20,180
59,149
1,216
121,582
7,143
338
15,983
485
1,344
73,950
10,341
179,661
3,840
85,312
15,864
377
16,171
356
19,902
420,506
17,857
251,996
112,589
458,755
48,112
1,069
73,804
161,987
805,719
43,720
35,606
4,075
13
14,008
(1)
7,739
59,988
6,775
273,935
144,234
5,006
168,157
1
158,962
506,309
39,244
121,114
15,050
2,586
28,564
84
136,232
332,660
6,786
2,215,799
171,353
1,900,948
808,335
13,433
74,512
1,315
85,053
2,795
(56)
28,211
270
1,691
60,512
10,177
156,462
3,426
69,940
8,495
377
17,412
339
5,738
313,146
14,653
224,943
89,682
282,932
50,615
1,075
70,918
91,608
869,660
29,763
26,010
5,087
46
11,814
(1)
(15,743)
(7,901)
5,679
251,996
133,822
4,614
152,814
1
81,917
321,395
35,851
108,794
10,951
2,276
28,909
(83)
66,859
219,379
3,153
1,884,030
72,555
1,507,870
562,281
Group
2011
Hicom Teck See Manufacturing Malaysia Sdn.
Bhd.
Sdn. Bhd.
B.S. Kah Pte. Ltd
112
11. Other investments
Unquoted
shares
RM’000
Quoted
shares in
Malaysia
RM’000
Quoted
shares
outside
Malaysia
RM’000
Quoted
bonds outside
Malaysia
RM’000
Quoted unit
trusts and
REITS
RM’000
Others
RM’000
Total
RM’000
Group
2012
Non-current
Less : Impairment loss
28,187
(413)
495
-
165,346
(20,309)
83,086
-
16,791
-
1,096
(22)
295,001
(20,744)
27,774
495
145,037
83,086
16,791
1,074
274,257
27,774
-
495
145,037
83,086
16,791
1,074
-
28,848
245,409
27,774
495
145,037
83,086
16,791
1,074
274,257
-
495
145,037
83,086
16,791
-
245,409
At cost
33,113
-
-
-
-
-
33,113
Representing items :
At cost
33,113
-
-
-
-
-
33,113
At cost
At fair value
Market value of quoted investments
Company
2012
113
11. Other investments (continued)
Unquoted
shares
RM’000
Quoted
shares in
Malaysia
RM’000
Quoted
shares
outside
Malaysia
RM’000
Quoted
bonds outside
Malaysia
RM’000
Quoted unit
trusts and
REITS
RM’000
Others
RM’000
Total
RM’000
Group
2011
Non-current
Less : Impairment loss
28,187
(351)
479
-
132,374
(21,784)
80,507
-
8,049
-
1,088
(22)
250,684
(22,157)
27,836
479
110,590
80,507
8,049
1,066
228,527
27,836
-
479
110,590
80,507
8,049
1,066
-
28,902
199,625
27,836
479
110,590
80,507
8,049
1,066
228,527
-
479
110,590
80,507
8,049
-
199,625
At cost
33,113
-
-
-
-
-
33,113
At cost
33,113
-
-
-
-
-
33,113
At cost
At fair value
Market value of quoted investments
Company
2011
114
12. Deferred tax assets and (liabilities) - Group
Recognised deferred tax assets and (liabilities)
Deferred tax assets and (liabilities) are attributable to the following :
Assets
2012
2011
RM’000
RM’000
- capital allowances
- revaluation
- fair value adjustment
Biological assets - capital allowances
Provisions
Capital allowances carry-forwards
Tax losses carry-forwards
Unutilised reinvestment allowances
Other investments
Others
Liabilities
2012
2011
RM’000
RM’000
Net
2012
RM’000
2011
RM’000
1,062
-
1,553
-
(14,951)
(289)
(17,705)
(291)
(13,889)
(289)
(16,152)
(291)
-
-
(7,214)
(7,214)
(7,214)
(7,214)
3,302
1,113
2,467
50
924
770
2,990
47
50
(3,537)
1,983
1,453
5,179
(10,128)
2,183
(4,190)
4,184
1,516
5,752
(5,672)
2,854
(3,537)
5,285
2,566
2,467
5,179
(10,128)
2,233
(4,190)
5,108
2,286
2,990
5,799
(5,672)
2,904
7,994
6,334
(25,321)
(20,766)
(17,327)
(14,432)
Deferred tax have not been recognised in respect of the following items (stated at gross) :
Deductible temporary differences
Capital allowances carry-forwards
Tax losses carry-forwards
Unutilised reinvestment allowances
2012
RM’000
2011
RM’000
15,004
3,898
26,672
4,755
15,039
3,067
20,278
4,568
50,329
42,952
The deductible temporary differences, capital allowances carry-forwards, tax losses carry-forwards,
unutilised reinvestment allowances and provisions do not expire under the Malaysian tax legislation.
Deferred tax assets have not been recognised in respect of these items as it is not probable that future
taxable profit will be available against which the Group can utilise the benefits therefrom.
The comparative figures have been restated to reflect the revised capital allowances carry-forwards, tax
losses carry-forwards and temporary differences available to the Group.
115
12. Deferred tax assets and (liabilities) - Group (continued)
The components and movements of deferred tax assets/(liabilities) are as follows :
At
1 January
2011
RM’000
Effect of
movement in
exchange
rate
RM’000
Recognised
in profit or
loss
RM’000
Recognised in
other
comprehensive
income
RM’000
At 31
December
2011
RM’000
Effect of
movement in
exchange
rate
RM’000
Recognised
in profit or
loss
RM’000
Recognised in
other
comprehensive
income
RM’000
At 31
December
2012
RM’000
Deferred tax assets
Other items
(1,378)
5,130
(12)
10
2,943
(359)
-
1,553
4,781
(5)
(310)
(486)
2,461
-
1,062
6,932
3,752
(2)
2,584
-
6,334
(315)
1,975
-
7,994
(20,883)
(294)
(38)
-
3,216
3
-
(17,705)
(291)
(35)
-
2,789
2
-
(14,951)
(289)
-
-
(7,214)
-
-
-
(7,214)
849
-
(4,190)
97
556
-
(3,537)
Deferred tax liabilities
- revaluation
- fair value adjustment
Biological assets
Unutilised reinvestment
allowances
Other items
(7,214)
-
(5,009)
(30)
5,815
3,249
59
(63)
(2,340)
1,914
5,752
2,882
(35)
(24,336)
(9)
1,665
1,914
(20,766)
27
(20,584)
(11)
4,249
1,914
(14,432)
(288)
Note 25
(573)
(3,006)
(4,350)
5,179
(4,509)
(232)
(4,350)
(25,321)
(4,350)
(17,327)
1,743
Note 25
116
13. Property development costs – Group
2012
RM’000
2011
RM’000
14,339
14,693
7,535
15,567
(8,864)
(10,342)
(7,414)
(8,507)
-
2,668
14,339
1,615
1,053
-
1,615
21,936
(9,212)
2,668
14,339
Add :
Development costs incurred during the year
Less:
Costs charged to profit or loss
Transfer to property, plant and equipment (Note 3)
Transfer to completed development properties
Balance at 31 December *
* This amount comprises :
Freehold land, at cost
Development costs
Accumulated costs charged to profit or loss
14. Trade and other receivables
Note
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
Trade
Amount due :
- within 1 year
- after 1 year
250,502
-
224,135
160
-
-
250,502
224,295
-
-
(651)
(847)
-
-
249,851
223,448
-
-
56,808
39,967
-
-
306,659
263,415
-
-
Unearned income
Amount due from associates
14.1
117
14. Trade and other receivables (continued)
Note
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
Non-trade
Amount due from subsidiaries
Other receivables
Deposits
Prepayments
14.2
14.3
14.3
46,420
5,110
7,149
53,184
5,983
5,841
130,794
17
19
-
356,908
5
19
-
58,679
65,008
130,830
356,932
365,338
328,423
130,830
356,932
14.1 Amount due from associates
The trade receivables due from associates are subject to normal trade terms.
14.2 Amount due from subsidiaries
Company
The amount due from subsidiaries for an amount of RM130,718,000 (2011 : RM161,138,500) is
subject to interest at the rates ranging from 0.86% to 3.10% (2011 : 0.87% and 3.50%) per
annum.
14.3 Other receivables and prepayments
Included in other receivables of the previous year is an amount of RM20.9 million representing
proceeds receivable from the sale of property, plant and equipment in China.
15. Inventories - Group
Completed development properties
2012
RM’000
2011
RM’000
16,396
7,641
50,120
35,512
59,009
68,134
20,578
47,215
144,641
135,927
13,287
54,868
40,300
2,672
16,077
54,441
42,544
2,968
272,164
259,598
Finished products
Manufactured goods
Assembled motor vehicles
Trading inventories
Work-in-progress
Raw materials
Consumable stores and spares
Hotel stocks
118
16. Cash and cash equivalents
Note
Fixed deposits :
With licensed banks
With licensed finance
companies
Cash and bank balances
Unit trust money market funds
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
1,793,366
2,372,313
121,658
257,809
63,729
77,891
-
-
16.1
1,857,095
2,450,204
121,658
257,809
16.2
597,717
169,204
430,126
-
3,610
93,855
1,777
-
2,624,016
2,880,330
219,123
259,586
16.1 Deposits placed with licensed banks pledged for banking/financing facilities
Included in the fixed deposits of the Group is an amount of RM73,000 (2011: RM42,527,000)
which is pledged for banking/financing facilities granted to certain subsidiaries (see Note 18).
16.2 Cash and bank balances
Included in cash and bank balances of the Group is an amount of RM4,202,000 (2011 :
RM1,235,000) held pursuant to Section 7A of the Housing Development (Control and Licensing)
Act, 1966 and are restricted from use in other operations.
17. Capital and reserves
17.1 Share capital
Group/Company
2012
2011
RM’000
RM’000
Authorised :
1,000,000,000 stocks of RM1 each
1,000,000
1,000,000
620,394
620,394
Issued and fully paid :
620,393,638 stocks of RM1 each
119
17. Capital and reserves (continued)
17.2 Reserves
Note
Non-distributable:
Share premium
Capital reserves
Foreign currency
translation reserves
Capital redemption
reserve
Asset revaluation reserve
Treasury stocks
Fair value reserve
Distributable:
Retained earnings
Capital reserve
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
17.3
1,099
1,073
1,099
1,073
-
-
17.4
478,589
460,226
-
-
17.5
17.7
17.6
68
474
(249)
74,334
68
474
(249)
39,073
68
(249)
-
68
(249)
-
555,388
501,764
(181)
(181)
3,381,095
40,248
3,236,295
40,248
290,944
29,992
247,723
29,992
3,421,343
3,276,543
320,936
277,715
3,976,731
3,778,307
320,755
277,534
4,597,125
4,398,701
941,149
897,928
17.8
Total equity attributable
to stockholders of the
Company
17.3 Capital reserves
The capital reserve comprises :
a)
surplus on sale of land and building and long term investments; and
b) reserve fund provided at 10% of net profit of a subsidiary in China.
17.4 Foreign currency translation reserves
The foreign currency translation reserve comprises all foreign currency differences arising from
the translation of the financial statements of foreign operations.
17.5 Asset revaluation reserve
The asset revaluation reserve relates to the revaluation of property, plant and equipment.
17.6 Fair value reserve
The fair value reserve includes the cumulative net change in the fair value of available-for-sale
investments until the investment is derecognised.
120
17. Capital and reserves (continued)
17.7 Treasury stocks
In year 2000, the Company purchased 100,000 of its issued stocks from the open market. The
average price paid for the stocks purchased was RM7.84 per stock. The repurchased stocks are
held as treasury stocks and carried at cost.
On 2 March 2001, 68,192 of the treasury stocks were cancelled and an amount equivalent to their
nominal value was transferred to Capital Redemption Reserve. Treasury stocks have no rights to
voting, dividends and participation in other distribution.
17.8 Retained earnings
The Company has opted for the single tier system and as such, the Company is able to distribute
dividends out of its entire retained earnings as at 31 December 2012.
18. Borrowings
This note provides information about the contractual terms of the Group’s and the Company’s interestbearing borrowings. For more information about the Group’s and the Company’s exposure to interest rate
and foreign currency risk, see Note 32.
Note
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
Current
Secured :
Other bank borrowings
Lease obligations
18.1
83,359
1,724
46,275
835
-
-
85,083
47,110
-
-
5,212
361,492
6,125
472,527
70,523
199,355
366,704
478,652
70,523
199,355
451,787
525,762
70,523
199,355
2,561
6,419
651
8,476
-
-
8,980
9,127
-
-
17,500
-
-
-
26,480
9,127
-
-
478,267
534,889
70,523
199,355
Unsecured :
Bank overdrafts
Non-current
Secured :
Lease obligations
Unsecured :
18.1
121
18. Borrowings (continued)
18.1 Lease obligations
Lease obligations are payable as follows :
2012
2011
Future
minimum
lease
payment
RM’000
Interest
RM’000
Present
value of
minimum
lease
payments
RM’000
1,812
88
1,724
905
70
835
2,617
56
2,561
678
27
651
4,429
144
4,285
1,583
97
1,486
Less than 1
year
Between 1 and
5 years
Future
minimum
lease
payment
RM’000
Interest
RM’000
Present
value of
minimum
lease
payments
RM’000
18.2 Terms and debts repayment schedule
Year of
maturity
Carrying
amount
RM’000
Under
1 year
RM’000
1-2
years
RM’000
2-5
years
RM’000
Over
5 years
RM’000
2013
19,607
5,212
337,505
98,855
9,057
3,746
19,607
5,212
337,505
74,937
9,057
3,746
8,685
-
8,233
-
7,000
-
473,982
450,064
8,685
8,233
7,000
15,369
6,125
141,115
357,570
13,224
15,369
6,125
141,115
349,094
13,224
4,365
-
4,111
-
-
533,403
524,927
4,365
4,111
-
Group
2012
Bankers’ acceptances
Bank overdrafts
Revolving credits
Term loans
Trust receipts
Promissory notes
2013
2013-2017
2013
Group
2011
Bankers’ acceptances
Bank overdrafts
Revolving credits
Term loans
Trust receipts
2012
2012
2012- 2016
2012
Company
The other bank borrowings of the Company represent short term loans with maturity within a year.
18.3 Interest rates
The bank borrowings carry interest at rates which vary according to prevailing base lending rates.
18.4 Security
The secured bank borrowings are secured by way of charge over certain properties of the Group
(see Note 3) and fixed deposit pledged (see Note 16).
122
19. Provision - Group
Free
servicing
RM’000
Extended
warranties
RM’000
Total
RM’000
384
1,511
1,895
Non-current
At 1 January 2011
Provision made
Provision used
524
(205)
9
At 31 December 2011
712
Provision made
Provision used
165
(263)
9
At 31 December 2012
623
782
31
1,306
(205)
40
2,324
3,036
986
(5)
61
1,151
(268)
70
3,366
3,989
The provision for extended warranties is based on estimates made from historical warranty costs of the
first 3 years with an added premium.
20. Deferred income
Group
Extended warranty income
Service package income
2012
RM’000
2011
RM’000
4,333
8,821
4,665
3,466
13,154
8,131
21. Trade and other payables
Note
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
Trade
Trade payables
133,498
154,704
-
-
1,264
127,332
20,407
341
104,421
48,426
33
1,070
19,931
72
1,036
149,003
153,188
1,103
21,039
282,501
307,892
1,103
21,039
Non-trade
Amount due to associates
Amount due to subsidiaries
Other payables
Accrued expenses
21.1
21.1
21.1 Amount due to associates and subsidiaries
The amount due to associates and subsidiaries are unsecured, interest-free and repayable on
demand.
123
22. Operating profit
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
Revenue
- Sale of goods and services
- Interest income
- Rental income
- Dividend income
2,692,992
68,660
32,302
13,095
2,944,241
59,823
47,486
57,448
158
11,463
960
91,304
151
9,137
659
73,184
2,807,049
3,108,998
103,885
83,131
Operating profit is arrived at :
Group
Company
2012
2011
RM’000
RM’000
2012
RM’000
2011
RM’000
455
468
835
400
489
646
60
-
60
-
5
241
41
48
95
191
55
103
5
130
-
5
78
-
11,728
278
182
12,217
414
162
-
-
90,919
3,451
89,051
2,018
104
4
85
4
608
16,459
1,369
14,965
239
115
240
84
1,173
-
1,146
3
600
-
577
-
10,524
649
21
11,740
1,344
23
326
15
-
288
230
-
1,539
1,183
38
1
296
1,652
-
23
-
After charging :
Auditors’ remuneration
Audit fees
- KPMG Malaysia
- Overseas affiliates of KPMG Malaysia
- Other auditors
Non-audit fees
- KPMG Malaysia
- Local affiliates of KPMG Malaysia
- Overseas affiliates of KPMG Malaysia
- Other auditors
Amortisation of :
- biological assets (Note 5)
- prepaid land lease payments (Note 7)
- development cost (Note 4)
Depreciation :
- property, plant and equipment (Note 3)
- investment properties (Note 8)
Direct operating expenses of investment
properties :
- Non-income generating
- Income generating
Directors’ emoluments
Directors of the Company :
- Fees
- current year
- prior year
- Remuneration
- current year
- prior year
- Benefits-in-kind
Past Directors of the Company
- Fees
- current year
- prior year
Bad and doubtful debts
Hire of equipment
124
22. Operating profit (continued)
Group
Company
2012
2011
RM’000
RM’000
2012
RM’000
2011
RM’000
296
9,794
-
63
10,312
-
2,660
67
2,052
-
1,273
193
7,668
-
4,939
7,411
25,113
21
-
29
31
8,925
5,359
12,791
11,413
-
-
293
-
2
26
524
-
94
67
-
8,881
4,214
37,682
15,570
4,196
8,940
72,352
8,985
1,027
-
38,578
29,953
4,653
-
3,132
-
1,787
25,003
1,958
1,067
-
57
1,704
-
885
6,924
68,660
32,302
4,800
21,887
59,823
47,486
3,445
8,018
960
827
627
2,817
6,320
659
10,612
15,628
5,297
209
1,237
871
13,591
6,754
-
814
-
After charging :
Interest expense on :
- Bank overdraft
- Other bank borrowings
- Subsidiaries
Asset written off
- Property, plant and equipment
- Biological assets
Rental of land and buildings
Unrealised loss on foreign exchange (net)
Impairment loss on :
- other investments
- intangible assets (Note 4)
Loss on disposal of :
- other investment
- subsidiary
- associates
Loss on liquidation of a subsidiary
Loss on other investment - realised
- unrealised
and crediting :
Dividends (gross) received from :
- Unquoted investments
- Unquoted subsidiaries
- Unquoted associates
- Unit trust
- Investments quoted in Malaysia
- Investments quoted outside Malaysia
Gain on disposal of :
- associates
- other investments
Reversal of impairment loss on:
- property, plant and equipment (Note 3)
- other investment
- investments in subsidiaries
- amount due from subsidiary
Reversal of write down of inventories (net)
Interest received from subsidiaries
Other interest income
Rental income
Gain on foreign exchange (net)
- Realised
- Unrealised
Gain on liquidation of a subsidiary
Bad debts recovered
125
23. Employee information
Group
2012
2011
RM’000
RM’000
Staff costs
301,806
287,406
Company
2012
2011
RM’000
RM’000
1,651
1,539
Included in staff costs of the Group and of the Company is an amount of RM21,115,000 (2011 :
RM20,206,000) and RM228,000 (2011 : RM211,000) respectively representing contributions made to
the Employees’ Provident Fund.
24. Key management personnel compensation
Key management personnel include all the Executive Directors of the Group and their compensations are
as disclosed in Note 22.
25. Income tax expense
Recognised in profit or loss
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
Income tax expense on continuing
operations
Share of tax of equity accounted associates
73,191
14,980
91,808
12,966
19,166
-
9,112
-
Total income tax expense
88,171
104,774
19,166
9,112
Major components of tax expense include :
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
Current tax expense
Malaysian - current year
- prior years
Overseas
- current year
- prior years
Total current tax
26,557
(286)
24,702
(38)
19,161
5
9,924
(812)
26,271
24,664
19,166
9,112
48,965
(302)
71,446
(53)
-
-
48,663
71,393
-
-
74,934
96,057
19,166
9,112
126
25. Income tax expense (continued)
Major components of tax expense include (continued):
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
Deferred tax expense
Origination and reversal of temporary
differences
Prior year
(2,177)
434
(2,131)
(2,118)
-
-
Total deferred tax
(1,743)
(4,249)
-
-
Share of tax of equity accounted
associates
14,980
12,966
-
-
Total tax expense
88,171
104,774
19,166
9,112
Reconciliation of effective tax expense
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
Profit for the year
Total tax expense
302,554
88,171
369,247
104,774
99,054
19,166
63,101
9,112
Profit excluding tax
390,725
474,021
118,220
72,213
97,681
118,505
29,555
18,053
(4,734)
15,588
(23,830)
(1,050)
1,844
(4,047)
16,968
(20,159)
(3,498)
-
641
(11,030)
-
2,807
(10,930)
-
1,215
1,611
(154)
(1,422)
2,075
(1,439)
(2,209)
(5)
5
(6)
(812)
Income tax at Malaysian tax rate of 25%
Effect of tax rates in foreign
jurisdictions *
Non-deductible expenses
Income not subject to tax
Tax incentives
Deferred tax assets not recognised
Recognition of previously unrecognised
deferred tax asset
Losses not available for set-off
Others
Under/(Over) provision in prior years
88,171
104,774
19,166
9,112
The corporate tax rate is 25% for years of assessment 2009 onwards. Consequently, deferred tax assets
and liabilities are measured using these tax rates.
*
The tax rates in several foreign jurisdictions are different from that of the Malaysian tax rate as the
subsidiaries operate in tax jurisdictions with lower or higher tax rates as the case may be.
26. Basic earnings per ordinary stock
The basic earnings per ordinary stock have been calculated based on the profit attributable to the owners
of the Company and the number of stocks in issue of 620,361,830 (2011 : 620,361,830), after deducting
the Treasury Stocks of 31,808 (2011 : 31,808).
127
27. Dividends
Dividends recognised by the Group and the Company are :
Group/Company
2012
2011
RM’000
RM’000
In respect of financial year 2011:
- Single tier interim dividend
- Final single tier dividend
In respect of financial year 2010:
- Second single tier interim dividend
- Final single tier dividend
Gross dividend per ordinary stock (sen)
18,611
37,222
-
55,833
-
-
18,611
18,611
-
37,222
8.0
9.0
A single tier interim dividend of 4% totalling RM24,814,473 in respect of the year ended 31 December
2012 was declared by the Directors on 28 February 2013 and payable on 10 May 2013.
The Directors proposed a single tier final dividend of 4% totalling RM24,814,473 in respect of the year
ended 31 December 2012, subject to approval of the stockholders at the forthcoming Annual General
Meeting.
The financial statements do not reflect these single tier interim and final dividends in relation to the
financial year ended 31 December 2012, which will be accounted for as an appropriation of retained
earnings in the year ending 31 December 2013.
The gross dividends per ordinary stock as disclosed above take into account the total interim and final
dividend declared for the financial year.
28. Commitments
Group
2012
RM’000
2011
RM’000
1,926
3,143
2,170
2,044
3,370
2,691
7,239
8,105
3,417
1,324
3,951
3,846
4,741
7,797
(i) Non-cancellable operating lease commitments
Within 1 year
Between 1 to 5 years
Above 5 years
(ii) Operating lease income commitments
Receivables:
Within 1 year
Between 1 to 5 years
128
28. Commitments (continued)
Group
2012
RM’000
2011
RM’000
1,297
164,358
180,407
160,994
25,806
346,062
186,800
(iii) Capital expenditure
- approved and contracted for
- approved but not contracted for
- contracted but not provided for
29. Operating segments
For management purposes, the Group is organised into business units based on their products and
services, and has the following main reportable segments :
Automotive and related products
Retailer, assembly and distributor of motor vehicles; manufacture of
engines, seats and other related parts as well as traders of spare parts,
accessories and related component parts
Plastic products
Manufacture, assembly and distribution of plastic component parts;
manufacture of plastic technical and industrial goods and equipment
Hotels and resorts
Hotelier
Investment holding and financial Investment in shares and bonds, letting of properties and leasing
services
companies
Plantation
Cultivation of oil palm
Others including property
development
a)
b)
c)
d)
e)
f)
Development of residential and commercial properties;
provision of management, marketing, advertisement and central
reservation services;
commission agents;
manufacture of wire netting, wire mesh, barbed wire, weld
mesh, nails and building materials;
distributor of cement and manufacturer and dealer of concrete
products; and
medical centre
Except as indicated above, no operating segments has been aggregated to form the above reportable
operating segments.
Management monitors the operating results of its business units separately for the purpose of making
decisions about resource allocation and performance assessment. Segment performance is evaluated
based on operating profit or loss which, in certain respects as explained in the table below, is measured
differently from operating profit or loss in the consolidated financial statements. Group financing
(including finance costs) and income taxes are managed on a group basis and are not allocated to
operating segments.
Transfer prices between operating segments are on arm’s length basis in a manner similar to transactions
with third parties.
129
29. Operating segments (continued)
Plantation
RM’000
Investment
holding and
financial
services
RM’000
Others
including
property
development
RM’000
Total of all
segments
RM’000
222,297
750
425,679
-
114,436
9,699
446,230
6,630
2,807,049
24,046
(24,046)
315,561
223,047
425,679
124,135
452,860
2,831,095
(24,046)
18,767
4,030
23,749
5,613
14,243
(817)
5,673
25,478
8,814
412
8,184
903
29,252
415
23,971
32,343
517
23,080
5,143
378
151,910
8,932
8,517
109
52,484
1,259
125,794
2,042
31
4,890
4,641
1,464
98
68,660
13,095
106,558
76,695
18,171
309,140
66,605
B
C
68,660
13,095
106,558
76,695
18,171
375,745
66,269
38,987
2,300,006
74,662
10,093
463,257
240,909
878,278
24,252
92,996
1,131,845
214,712
10
363,807
16,094
21,756
574,024
395,989
404,751
5,711,217
426,623
D
E
395,989
404,751
6,137,840
Automotive
and related
products
RM’000
Plastic
products
RM’000
Hotels and
resorts
RM’000
Revenue from external customers
Inter-segment revenue
1,289,060
753
309,347
6,214
Total revenue
1,289,813
Reconciliation/
Elimination
RM’000
Total per
consolidated
financial
statements
RM’000
Notes
2012
Results
Interest income
Dividend income
Depreciation and amortisation
Share of results of associates
Other non-cash expenses
Segment profit
Assets
Investment in associates
Additions to non-current assets
Segment assets
130
A
2,807,049
2,807,049
Plantation
RM’000
Investment
holding and
financial
services
RM’000
Others
including
property
development
RM’000
Total of all
segments
RM’000
193,217
-
533,003
-
165,077
6,833
423,353
4,686
3,108,998
16,954
(16,954)
379,947
193,217
533,003
171,910
428,039
3,125,952
(16,954)
15,445
4,121
25,595
5,670
4,847
49,541
2,579
28,177
13,046
73
37,739
963
23,965
107
30,256
32,035
16,720
21,448
3,884
18,945
212,098
7,093
35,535
792
10,347
25,556
105,765
61,777
34,804
2,390,511
80,536
22,864
463,203
3,116
652,297
20,332
64,791
1,143,440
158,823
11,333
396,937
Automotive
and related
products
RM’000
Plastic
products
RM’000
Hotels and
resorts
RM’000
Revenue from external customers
Inter-segment revenue
1,417,883
1,953
376,465
3,482
Total revenue
1,419,836
Reconciliation/
Elimination
RM’000
Total per
consolidated
financial
statements
RM’000
Notes
2011
Results
Interest income
Dividend income
Depreciation and amortisation
Other non-cash expenses
Segment profit
Assets
Additions to non-current assets
Segment assets
131
1,708
1,072
3,885
4,242
6,189
(1,158)
13,054
27,167
572,330
A
3,108,998
3,108,998
59,823
57,448
103,862
37,189
55,717
434,241
26,814
B
C
59,823
57,448
103,862
37,189
55,717
461,055
334,522
164,075
5,618,718
346,848
D
E
334,522
164,075
5,965,566
Notes
Nature of adjustments and eliminations to arrive at amounts reported in the consolidated
financial statements
A
Inter-segment revenue are eliminated on consolidation.
B
Other material non-cash expenses consist of the following items as presented in the respective
notes to the financial statements
Note
Unrealised loss on foreign
exchange, gross
Write-down of inventories, gross
Bad and doubtful debts, gross
Property, plant and equipment written off
Biological assets written off
Impairment loss on intangible assets
Impairment loss on other investments
C
22
22
22
22
2012
RM’000
2011
RM’000
8,387
960
1,999
1,273
193
5,359
-
25,492
114
968
4,939
11,413
12,791
18,171
55,717
The following items are added to/(deducted from) segment profit to arrive at “Profit before
tax from continuing operations” presented in the consolidated statement of comprehensive
income
2012
RM’000
Interest expense
D
76,695
(10,090)
37,189
(10,375)
66,605
26,814
Additions to non-current asset other than financial instruments and deferred tax assets consist
of :
Note
2012
2011
RM’000
RM’000
Biological assets
Intangible assets
Investment Properties
E
2011
RM’000
3
5
7
4
6
8
315,749
76,709
303
396
11,594
95,147
31,911
810
961
35,246
-
404,751
164,075
The following items are added to/(deducted from) segment assets to arrive at total assets
reported in the consolidated statement of financial position :
2012
2011
RM’000
RM’000
Current tax assets
Deferred tax assets
Investment in a non-consolidated subsidiary
132
395,989
45,507
7,994
(22,867)
334,522
28,859
6,334
(22,867)
426,623
346,848
Geographical information
Revenue and non-current assets information based on the geographical location of customers and assets respectively. The amounts of non-current assets do not include
investments in subsidiaries, investments in associates, other investments and deferred tax assets.
Malaysia
RM’000
Singapore
RM’000
Indonesia
RM’000
Australia
RM’000
Others
RM’000
Eliminations
RM’000
Consolidated
RM’000
2012
Revenue from external customers by location of
customers
Non-current assets by location of assets
1,857,510
319,004
397,504
129,865
103,166
-
2,807,049
863,471
206,863
345,232
285,170
472,038
-
2,172,774
2,003,953
396,262
488,041
152,125
68,617
-
3,108,998
855,652
239,562
259,465
290,835
261,987
-
1,907,501
2011
Revenue from external customers by location of
customers
Non-current assets by location of assets
Major customers
There are no customers with revenue equal or more than 10% of the group’s total revenue.
133
30. Contingent liabilities, unsecured - Company
i)
The Company has issued corporate guarantees to financial institutions for banking facilities granted
to certain subsidiaries up to a limit of RM321.4 million (2011 : RM333.9 million) of which
RM183.9 million (2011 : RM210.4 million) was utilised as at the end of the reporting date.
ii) The Company has also issued corporate guarantees to certain non-financial institutions for the supply
of goods and services provided to certain subsidiaries up to a limit of RM62.5 million
(2011 : RM44.5 million) of which RM6.2 million (2011 : RM6.5 million) was utilised as at the end
of the reporting date.
iii) The Company also undertakes to provide financial support for certain subsidiaries to enable them to
continue as a going concern.
31. Related parties
31.1 For the purposes of these financial statements, parties are considered to be related to the Group or
the Company if the Group or the Company has the ability, directly or indirectly, to control the
party or exercise significant influence over the party in making financial and operating decisions,
or vice versa, or where the Group or the Company and the party are subject to common control or
common significant influence. Related parties may be individuals or other entities. Related parties
include the following :
a)
The Company has a controlling related party relationship with its direct and indirect
subsidiaries and the associates of the Group as disclosed in the financial statements;
b) The Company also has a related party relationship with :
i)
the substantial shareholder, Boon Siew Sdn Berhad which holds a 43% interest in the
Company and presumed to exercise significant influence over the Company;
ii) the subsidiaries of Boon Siew Sdn Berhad and the direct and indirect associates of Boon
Siew Sdn Berhad
(hereinafter referred as “Boon Siew Group of Companies”); and
iii) The key Directors and key management personnel of the Group
- Dato’ Seri Loh Cheng Yean, DGPN, DSPN
- Dato’ Robert Wong Lum Kong, DSSA, JP
- Dato’ Seri Lim Su Tong, DGPN, DSPN
- Dato’ Dr. Tan Chong Siang, DSPN, DJN, PKT
- Datuk Loh Kian Chong, DMSM
Key management personnel are defined as those persons having authority and
responsibility for planning, directing and controlling the activities of the Group either
directly or indirectly.
134
31. Related parties (continued)
31.2 Significant transactions with related parties other than those disclosed elsewhere in the financial
statements are as follows :
a)
With subsidiaries
Company
2012
2011
RM’000
RM’000
i) Rental receivables
ii) Interest income
iii) Interest expenses
60
2,817
-
370
3,445
67
b) With associates of the Group
Group
i)
ii)
iii)
iv)
Sale of goods
Rental receivable (net)
Management fee and commission payable
Purchase of goods
2012
RM’000
2011
RM’000
268,899
1,439
276
10,501
253,365
1,931
297
46,763
Company
2012
2011
RM’000
RM’000
i)
c)
Rental receivable
48
581
With Boon Siew Group of Companies
Group
2012
RM’000
Commission receivable in respect of advertising,
marketing and hotel reservation services
ii) Sale of goods
iii) Purchase of goods
iv) Rental charges payables (net)
v) Management fees received
2011
RM’000
i)
135
1,370
2,303
289
(451)
15
1,120
1,806
832
(701)
15
31. Related parties (continued)
c)
With Boon Siew Group of Companies (continued)
Company
2012
2011
RM’000
RM’000
i)
Rental payables
31
31
d) There were no transactions with the Directors and key management personnel other than the
remuneration package paid to them in accordance with the terms and conditions of their
appointment as disclosed in Note 22.
The Directors of the Company are of the opinion that the above transactions were entered in the
normal course of business and the terms of which have been established on a negotiated basis.
31.3 Significant non-trade related party balances
The significant non-trade balances with related parties at end of reporting period are as disclosed
in Note 14 and Note 21 to the financial statements.
32. Financial instruments
32.1 Net gains and losses arising from financial instruments
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
Net gains/(losses) on:
Available-for-sale
financial assets
- recognised in other
comprehensive
income
- recognised in profit
or loss
Loans and receivables
measured at amortised
cost
32,013
(30,163)
-
-
13,687
67,355
46,615
60,398
92,371
11,463
74,888
9,764
(10,090)
(10,375)
(2,727)
(2,052)
102,965
66,475
136
101,107
82,600
32. Financial instruments (continued)
32.2 Financial risk management
The Group has exposure to the following risks from its use of financial instruments:



Credit risk
Liquidity risk
Market risk
32.3 Credit risk
Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial
instrument fails to meet its contractual obligations. The Group’s exposure to credit risk arises
principally from its receivables from customers and investment in debt securities. The Company’s
exposure to credit risk arises principally from loans and advances to subsidiaries and financial
guarantees given to banks for credit facilities granted to subsidiaries.
Receivables
Risk management objectives, policies and processes for managing the risk
The Group controls its credit risk by the application of credit approvals, limits and monitoring
procedures. Credit evaluations are performed on all customers requiring credit over a certain
amount and strictly limiting the Group’s associations to business partners with high credit
worthiness. Trade receivables are monitored on an ongoing basis.
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the maximum exposure to credit risk arising from receivables
is represented by the carrying amounts in the statement of financial position.
Management has taken reasonable steps to ascertain that receivables that are neither past due nor
impaired are measured at their realisable values. A significant portion of these receivables are
regular customers that have been transacting with the Group. The Group uses ageing analysis to
monitor the credit quality of the receivables.
Impairment losses
The ageing of receivables as at the end of the reporting period was :
Gross
RM’000
Individual
impairment
RM’000
Collective
impairment
RM’000
Net
RM’000
315,546
24,452
7,149
4,835
12,864
50
299
144
1,576
9,688
10
-
315,496
24,153
6,995
3,259
3,176
364,846
11,757
10
353,079
Group
2012
Not past due
Past due < 3 months
Past due 3-6 months
Past due 6-12 months
Past due more than 1 year
137
32.3 Credit risk (continued)
Receivables (continued)
Impairment losses (continued)
Gross
RM’000
Individual
impairment
RM’000
Collective
impairment
RM’000
Net
RM’000
283,423
18,087
10,908
2,326
12,090
12
76
92
10,039
16
-
283,423
18,075
10,832
2,218
2,051
326,834
10,219
16
316,599
130,811
-
-
130,811
356,913
-
-
356,913
Group
2011
Not past due
Past due < 3 months
Past due 3-6 months
Past due 6-12 months
Past due more than 1 year
Company
2012
Not past due
2011
Not past due
The movements in the allowance for impairment losses of receivables during the financial year
were :
Group
2012
2011
RM’000
RM’000
At 1 January
Effect of movement in
exchange rate
Impairment loss recognised
Impairment loss reversed
Impairment loss written off
10,235
At 31 December
11,767
(1)
1,829
(290)
(6)
Company
2012
2011
RM’000
RM’000
12,108
-
21,300
11
755
(459)
(2,180)
-
(627)
(20,673)
10,235
-
-
Although some of the receivables are secured by third party financial guarantees, it is
impracticable to estimate the fair values of the guarantees obtained.
The allowance account in respect of receivables is used to record impairment losses. Unless the
Group is satisfied that recovery of the amount is possible, the amount considered irrecoverable is
written off against the receivable directly.
138
Investments and other financial assets
Investments are allowed only in liquid securities and only with counterparties that have a credit
rating equal to or better than the Group.
As at the end of the reporting period, the Group has invested in domestic and overseas securities.
The maximum exposure to credit risk is represented by the carrying amounts in the statement of
financial position.
In view of the sound credit rating of counterparties, management does not expect any counterparty
to fail to meet its obligations.
Financial guarantees
The Company provides unsecured financial guarantees to banks in respect of banking facilities
granted to certain subsidiaries. The Company also provides guarantees to certain non-financial
institutions for the supply of goods and services to certain subsidiaries. The Company monitors on
an ongoing basis the results of the subsidiaries and repayments made by the subsidiaries.
The maximum exposure to credit risk amounts to RM383.9 million (2011: RM216.9 million)
representing the outstanding banking facilities and guarantees granted to certain non-financial
institution for the supply of goods and services to certain subsidiaries as at the end of the reporting
period.
As at the end of the reporting period, there was no indication that any subsidiary would default on
repayment.
The financial guarantees have not been recognised since the fair value on initial recognition was
not material.
139
Inter company balances
The Company provides unsecured loans and advances to subsidiaries. The Company monitors the
results of the subsidiaries regularly.
As at the end of the reporting period, the maximum exposure to credit risk is represented by their
carrying amounts in the statement of financial position.
Impairment losses
As at the end of the reporting period, there was no indication that the loans and advances to the
subsidiaries are not recoverable. The Company does not specifically monitor the ageing of the
current advances to the subsidiaries. Nevertheless, these advances are not considered to be overdue
and are repayable on demand.
32.4 Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall
due. The Group’s exposure to liquidity risk arises principally from its various payables, loans and
borrowings.
The Group actively manages its debt maturity profile, operating cash flows and the availability of
funding to ascertain that all funding needs are met. As part of its overall prudent liquidity
management, the Group endeavours to maintain sufficient level of cash or cash convertible
investments to meet its working capital requirements.
140
32. Financial instrument (continued)
32.4 Liquidity risk (continued)
Maturity analysis
The table below summarises the maturity profile of the Group’s and Company’s financial liabilities as at the end of the reporting period based on undiscounted
contractual payments :
Carrying
amount
RM’000
Contractual
interest
rate/coupon
%
Contractual
cash flows
RM’000
Under
1 year
RM’000
1-2 years
RM’000
2-5 years
RM’000
More than
5 years
RM’000
81,046
8,732
4,285
378,992
5,212
282,501
1.00 - 5.12
4.65 - 7.84
2.80 - 7.20
1.12 - 15.30
4.65 - 8.30
-
81,046
9,508
4,429
383,340
5,212
282,501
81,046
2,658
1,812
361,377
5,212
282,501
4,877
2,277
5,668
-
1,973
340
7,747
-
7,548
-
766,036
735,606
12,822
10,060
7,548
70,523
1,103
70,523
1,103
-
-
-
71,626
71,626
-
-
-
Group
2012
Non-derivative financial liabilities
Secured revolving credit
Secured term loans
Finance lease liabilities
Unsecured bank facilities
Bank overdrafts
760,768
Company
2012
Other borrowings
70,523
1,103
1.35
-
71,626
141
32.4 Liquidity risk (continued)
Maturity analysis (continued)
The table below summarises the maturity profile of the Group’s and Company’s financial liabilities as at the end of the reporting period based on undiscounted
contractual payments :
Carrying
amount
RM’000
Contractual
interest
rate/coupon
%
Contractual
cash flows
RM’000
Under
1 year
RM’000
1-2 years
RM’000
2-5 years
RM’000
More than
5 years
RM’000
43,283
12,516
1,583
472,527
6,125
307,892
43,283
3,375
905
472,527
6,125
307,892
4,877
528
-
4,264
150
-
-
843,926
834,107
5,405
4,414
-
199,355
21,039
199,355
21,039
-
-
-
220,394
220,394
-
-
-
Group
2011
Secured revolving credit
Secured term loans
Finance lease liabilities
Unsecured bank facilities
Bank overdrafts
43,283
11,468
1,486
472,527
6,125
307,892
1.17 - 6.64
4.07 - 9.84
2.80 - 9.00
1.14 - 7.20
7.10 - 8.30
-
842,781
Company
2011
Other borrowings
199,355
21,039
1.22 – 1.40
-
220,394
142
32.5
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest
rates and other prices will affect the Group’s financial position or cash flows.
32.5.1
Currency risk
The Group is exposed to foreign currency risk on sales, purchases and borrowings that are
denominated in a currency other than the respective functional currencies of Group entities.
The currencies giving rise to this risk are primarily U.S. Dollar, Singapore Dollar, Australian
Dollar, New Zealand Dollar, Japanese Yen, Thai Baht and Great Britain Pound.
Exposure to foreign currency risk
The Group’s exposure to foreign currency (a currency which is other than the currency of the
Group entities) risk, based on carrying amounts as at the end of the reporting period was:
143
32.5.1
Currency risk (continued)
Exposure to foreign currency risk (continued)
US
Dollar
RM’000
Japanese
Yen
RM’000
Australian
Dollar
RM’000
Thai
Baht
RM’000
Great
Britain
Pound
RM’000
Singapore
Dollar
RM’000
New
Zealand
Dollar
RM’000
Group
2012
Borrowings
4,519
(15,511)
96,995
440
(393,992)
(4,901)
1,630
783
157,199
(5,195)
-
2,795
(38)
288
172
30,616
Exposure in the statement of financial
position
86,003
(396,823)
157,982
(5,195)
2,795
250
30,788
Borrowings
Intra-group balances
31,624
64,218
360
(70,523)
-
-
-
-
232
-
-
Exposure in the statement
of financial position
95,842
(70,163)
-
-
-
232
-
Company
2012
144
32.5.1
Exposure to foreign currency risk (continued)
US
Dollar
RM’000
Japanese
Yen
RM’000
Australian
Dollar
RM’000
Thai Baht
RM’000
Great
Britain
Pound
RM’000
Singapore
Dollar
RM’000
New Zealand
Dollar
RM’000
Group
2011
Borrowings
4,881
(5,867)
(14,383)
158,668
974
(480,999)
(2,759)
25,454
810
147,308
(5,690)
-
49
2,520
76
(10)
32
224
28,297
143,299
(457,330)
148,118
(5,690)
2,569
98
28,521
Borrowings
Intra-group balances
47,913
72,346
(199,355)
-
-
-
-
32
17,080
-
120,259
(199,355)
-
-
-
17,112
-
Company
2011
145
32.5
Market risk (continued)
32.5.1
Currency risk sensitivity analysis
A 5% (2011: 5%) strengthening of the Ringgit Malaysia (“RM”) against the following
currencies at the end of the reporting period would have increased (decreased) the post-tax
profit or loss by the amounts shown below. This analysis assumes that all other variables, in
particular interest rates, remained constant and ignores any impact of forecasted sales and
purchases.
Profit or loss
RM’000
RM’000
2012
2011
Group
US dollar
Japanese yen
Australian dollar
Thai baht
Great Britain pound
Singapore dollar
New Zealand dollar
(3,225)
14,881
(5,924)
195
(105)
(9)
(1,155)
(5,374)
17,150
(5,554)
213
96
(4)
(1,070)
(3,594)
2,631
(9)
(4,510)
7,476
(642)
Company
US dollar
Japanese yen
Singapore dollar
A 5% (2011 : 5%) weakening of RM against the above currencies at the end of the reporting
period would have had equal but opposite effect on the above currencies to the amounts shown
above, on the basis that all other variables remained constant.
32.5.2
Interest rate risk
The Group’s investments in fixed rate borrowings are exposed to a risk of change in their fair
value due to changes in interest rates. The Group’s variable rate borrowings are exposed to a
risk of change in cash flows due to changes in interest rates. Investments in equity securities
and short term receivables and payables are not significantly exposed to interest rate risk.
Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. Fair value interest rate risk is the risks
that the value of a financial instrument will fluctuate due to changes in market interest rates.
The Company’s income and operating cash flows are substantially independent of changes in
market interest rates. The Company’s interest-earning financial assets are mainly short term in
nature and are mostly placed in fixed deposits.
146
32.5
32.5.2
Interest rate risk (continued)
Exposure to interest rate risk
The interest rate profile of the Group’s and the Company’s significant interest-earning and
interest-bearing financial instruments, based on carrying amounts as at the end of the reporting
period was:
Group
2012
RM’000
2011
RM’000
Company
2012
2011
RM’000
RM’000
Fixed rate instruments
Financial assets
- Quoted bonds
- Fixed deposits
- Lease obligations
- Other borrowings
83,086
1,928,537
80,507
2,450,204
121,658
257,809
2,011,623
2,530,711
121,658
257,809
4,285
80,463
1,486
41,676
-
-
84,748
43,162
-
-
5,212
388,307
6,125
485,602
70,523
199,355
393,519
491,727
70,523
199,355
Floating rate
instruments
- Bank overdrafts
- Other borrowings
Interest rate risk sensitivity analysis
(a)
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value
through profit or loss. Therefore, a change in interest rates at the end of the reporting
period would not affect profit or loss.
147
32.5
32.5.2
Interest rate risk (continued)
Interest rate risk sensitivity analysis (continued)
(b)
Cash flow sensitivity analysis for variable rate instruments
A change of 50 basis points (bp) in interest rates at the end of the reporting period would
have increased (decreased) post-tax profit or loss by the amounts shown below. This
analysis assumes that all other variables, in particular foreign currency rates, remained
constant.
Profit or loss
50bp increase
50bp decrease
RM’000
RM’000
Group
2012
Floating rate instruments
- Bank overdrafts
- Other borrowings
Company
2012
- Other borrowings
(19)
(1,456)
19
1,456
(1,475)
1,475
(264)
264
(23)
(1,821)
23
1,821
(1,844)
1,844
(748)
748
Group
2011
- Bank overdrafts
- Other borrowings
Company
2011
- Other borrowings
32.5.3
Other price risk
Equity price risk arises from the Group’s investments in equity securities.
Management of the Group monitors the equity investments on a portfolio basis. Material
investments within the portfolio are managed on an individual basis and all buy and sell
decisions are approved by the Group Executive Directors, as appropriate.
148
32.5
32.5.3
Other price risk (continued)
Equity price risk sensitivity analysis
This analysis assumes that all other variables remain constant and the Group’s equity
investments moved in correlation with the Singapore Stock Exchange (SGX).
A 10% strengthening in SGX index at the end of the reporting period would have increased
equity by RM16,232,000 (2011: RM11,912,000). A 10% weakening in SGX index would have
had equal but opposite effect on equity respectively.
Impairment losses
An impairment loss in respect of quoted shares of RM20,744,000 (2011 : RM 22,157,000) of
the Group was recognised as at the end of the reporting period owing to the significant and
prolonged decline in market value.
Investments and other financial assets
The movements in the allowance for impairment loss during the financial year were
Group
2012
2011
RM’000
RM’000
Company
2012
2011
RM’000
RM’000
At 1 January
Effect of movement in
exchange rate
Impairment loss
(reversed)/recognised
Impairment loss
written off
22,157
9,413
-
-
(528)
263
-
-
(885)
12,791
-
-
-
-
At 31 December
20,744
-
-
-
(310)
22,157
32.6 Fair value of financial instruments
The carrying amounts of cash and cash equivalents, short term receivables and payables and short
term borrowings approximate fair values due to the relatively short term nature of these financial
instruments.
149
32.6 Fair value of financial instruments (continued)
The fair values of financial assets and liabilities, together with the carrying amounts shown in the
statements of financial position, are as follows:
2012
2011
Carrying
amount
RM ’000
Fair
value
RM ’000
Carrying
amount
RM ’000
Fair
value
RM ’000
145,532
145,532
111,069
111,069
99,877
27,774
1,074
99,877
Note a
1,074
88,556
27,836
1,066
88,556
Note a
1,066
Group
Financial assets
categorised as
available-for-sale
Other investments
- Quoted shares
- Quoted bonds, unit
trusts & REITS
- Unquoted shares
- Others
228,527
274,257
Financial assets
categorised as loans
and receivables
Trade and other
receivables (excluding
deposits and
prepayments)
353,079
2,624,016
Note b
Note b
316,599
2,880,330
Note b
Note b
3,425,456
3,251,352
carried at amortised
cost
Borrowings
- Fixed rate borrowings
- Floating rate
borrowings
282,501
Note b
307,892
Note b
84,748
84,374
43,162
41,008
393,519
393,519
491,727
491,727
478,267
534,889
760,768
842,781
150
2012
2011
Carrying
amount
RM ’000
Fair
value
RM ’000
Carrying
amount
RM ’000
Fair
value
RM ’000
33,113
Note a
33,113
Note a
130,811
219,123
Note b
Note b
356,913
259,586
Note b
Note b
Company
Financial assets
categorised as
available-for-sale
Other investments
- Unquoted shares
Financial assets
categorised as loans
and receivables
Trade and other
receivables (excluding
deposits and
prepayments)
616,499
349,934
carried at amortised
cost
Floating rate borrowings
1,103
70,523
71,626
Note b
70,523
21,039
199,355
Note b
199,355
220,394
Notes :
(a) Fair value information has not been disclosed for the Group’s investment in unquoted equity
instruments that are carried at cost because fair value cannot be measured reliably. These
equity instruments represent interests held in companies that are not quoted on any market.
The Group does not intend to dispose of these investments in the foreseeable future.
(b) The carrying amounts of cash and cash equivalents, trade and other receivables as well as
trade and other payables approximate fair values due to the relatively short term nature of
these financial instruments.
151
The following summarises the methods used in determining the fair value of financial instruments
reflected in the above table.
Investments in equity and debt securities
The fair values of financial assets that are quoted in an active market are determined by reference
to their quoted closing bid price at the end of the reporting period.
Fair value, which is determined for disclosure purposes, is calculated based on the present value of
future principal and interest cash flows, discounted at the market rate of interest at the end of the
reporting period. For finance leases, the market rate of interest is determined by reference to
similar lease agreements.
32.6.1
Fair value hierarchy
The table below analyses financial instruments carried at fair value, by valuation method. The
different levels have been defined as follows :



Level 1 : Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 : Inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from
prices).
Level 3: Inputs for the asset or liability that are not based on observable market date
(unobservable inputs).
Level 1
RM’000
Level 2
RM’000
Level 3
RM’000
Total
RM’000
83,086
145,532
12,151
4,640
-
83,086
145,532
16,791
240,769
4,640
-
245,409
80,507
111,069
3,636
4,413
-
80,507
111,069
8,049
195,212
4,413
-
199,625
Group
2012
Financial assets
Quoted bonds
Quoted shares
Quoted unit trust and REITS
2011
Financial assets
Quoted bonds
Quoted shares
Quoted unit trust and REITS
152
33. Capital management
The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the
Group’s ability to continue as a going concern, so as to maintain investor, creditor and market confidence
and to sustain future development of the business. The Directors monitor and determine to maintain an
optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements.
The Group actively and regularly reviews and manages its capital structure to ensure optimal capital
structure and shareholders returns, taking into consideration the future capital requirements of the Group
and capital efficiency, prevailing and projected strategic investment opportunities. To maintain or adjust
capital structure, the Group may adjust the dividend payment to stockholders.
The Group monitors capital on the basis of the Group’s consolidated gearing ratio, calculated as net debt
divided by total equity. Net debt is calculated as total borrowings less bank balances and other liquid
funds. The ratio is monitored by corporate management. The Group does not have a defined gearing
benchmark or range.
Group
2012
RM’000
2011
RM’000
Total borrowings (Note 18)
Less : Cash and cash equivalents (Note 16)
478,267
2,624,016
534,889
2,880,330
Net cash
2,145,749
2,345,441
Total equity
5,325,401
5,068,295
#
#
Debt-to-equity ratios
# Not applicable due to net cash position
There were no changes in the Group’s approach to capital management during the financial year.
34. Significant events
(a)
Kah Motor Company Sdn. Berhad (“Kah Motor”), a wholly owned subsidiary of the Company,
incorporated the following three offshore wholly-owned subsidiary companies:
(i) Silver Beech Holdings Limited (“SBHL”), a limited liability company was incorporated in
Jersey, United Kingdom on 22 November 2011 with an authorized share capital of £10,000
divided into 10,000 shares of £1.00 each. A total of 102 shares of £1.00 each was issued to
Kah Motor. SBHL is principally engaged as an investment holding company.
(ii) Silver Beech Operations UK Limited (“SBO”), a limited liability company was incorporated
in London, United Kingdom on 28 November 2011 with an authorized share capital of
£10,000 divided into 10,000 share of £1.00 each. A total of 102 shares of £1.00 each was
issued to Kah Motor. SBO is principally engaged in managing and operating of hotels.
(iii) Silver Beech (IOM) Limited (“SBL”), a limited liability company was incorporated in the Isle
of Man, United Kingdom on 20 December 2011 with an authorized share capital of £2,000
divided into 2,000 shares £1.00 each. A total of 102 shares of £1.00 each was issued to Silver
Beech Holdings Limited, owned by Kah Motor. SBL is principally engaged as an investment
holding company.
153
34. Significant events (continued)
SBO and SBL subsequently entered into a Sale and Purchase Agreement on 3 February 2012 with
Curzon Hotel Properties (GP) Limited, The Curzon Hotel Properties Limited Partnership and
Curzon Hotel (Operator) Limited for the acquisition of the business, lease of assets of Kingsley
Hotel in London, United Kingdom for a total cash consideration of GBP42.712 million
(approximately RM205 million).
(b)
Oriental Boon Siew (Mauritius) Pte. Ltd. (“OBSM”), a 50.5% subsidiary of the Company had
incorporated a wholly-owned subsidiary, known as OAM Asia (Singapore) Pte. Ltd. (“OAMS”) in
Singapore on 6 March 2012 with an initial issued and paid up share capital of SGD2. OAMS is
principally engaged as an investment holding company.
(c)
The Company entered into a Share Purchase Agreement (“SPA”) to dispose of its 1% equity
interest in Boon Siew Honda Sdn. Bhd. for 25,000 ordinary shares of RM1.00 each for a total cash
consideration of RM1,079,080 to Honda Motor Co. Ltd.. The disposal was completed on 10
February 2012.
(d)
Teck See Plastic Sdn. Bhd. (“TSP”), a 60% owned subsidiary of the Company, had on 20 April
2012 entered into a Joint Venture Agreement with Kasai Kogyo Co. Ltd (“Kasai”) to establish a
new Joint Venture Company to be named Kasai Teck See (Malaysia) Sdn. Bhd. (“KTSM”). TSP
holds 75% interests in KTSM while Kasai holds the remaining 25%. KTSM is principally engaged
in the business of designing, research and development, manufacturing, sale of plastic and
automotive interior parts as well as to streamline the operations of TSP.
(e)
Unique Mix (Penang) Sdn. Bhd. (“U Mix”), a 70% owned subsidiary of Simen Utara Sdn. Bhd.
(“SU”), which in turn is a 91% owned subsidiary of Kwong Wah Enterprise Sdn. Bhd. (“KWE”),
a wholly-owned subsidiary of the Company, acquired the remaining 21,000 ordinary shares of
RM1.00 each, representing 7% of the total issued and paid-up share capital in Konkrit Utara Sdn.
Bhd. (“K Utara”) for a cash consideration of RM2,100. Upon completion of the said acquisition on
21 November 2012, K Utara became the wholly owned subsidiary of U Mix.
(f)
AT-TS Marketing Sdn. Bhd. (“AT-TS”), a wholly-owned subsidiary of Teck See Plastic Sdn. Bhd.
(“TSP”) which in turn is a 60% owned subsidiary of the Company, had on 18 December 2012
commenced member’s voluntary winding up proceedings. AT-TS was incorporated in Malaysia
on 9 April 1994. AT-TS had ceased operations and is currently dormant.
35. Subsequent events
Subsequent to the end of the reporting period, Hymold (Su Zhou) Co., Ltd. (“Hymold”), an 88.99%
owned subsidiary of Oriental International (Mauritius) Pte. Ltd. (“OIM”) which in turn, is a 100% owned
subsidiary of the Company, had on 1 January 2013 resolved to voluntarily wind up Hymold. Hymold was
incorporated in Suzhou New District, China on 17 December 1993 with a registered capital of USD9
million. Hymold had ceased operations and is currently dormant.
36. Details of subsidiaries
Group’s effective interest
2012
2011
%
%
Name of subsidiaries and principal activities
Oriental Realty Sdn. Berhad
Property development and investment holding
Subsidiary company of Oriental Realty Sdn. Berhad.
- Kenanga Mekar Sdn. Bhd.
154
100.0
100.0
100.0
100.0
36. Details of subsidiaries (continued)
Name of subsidiaries and principal activities (continued)
2012
2011
%
%
Syarikat Oriental Credit Berhad
Money lending
100.0
100.0
Dragon Frontier Sdn. Bhd.
Manufacture of plastic moulded parts for electrical,
electronics and automotive industries
100.0
100.0
Bayview International Sdn. Bhd.
Provision of management, marketing, advertisement and central
reservation services
100.0
100.0
Oriental Rubber & Palm Oil Sdn. Berhad
Cultivation of oil palm, investment holding and letting of parking lots
100.0
100.0
51.0
51.0
Compounding and Colouring Sdn. Bhd.
Manufacture and sale of polypropylene compounds
70.0
70.0
Oriental Assemblers Sdn. Bhd.
Assembly of motor vehicles and manufacture and sale of engines and
transmissions
97.2
97.2
Oriental Nichinan Design Engineering Sdn. Bhd.
Design, manufacture and sale of prototype plastic models
88.0
88.0
100.0
100.0
Armstrong Cycle Parts (Sdn.) Berhad *
Manufacture of automotive control cables and spokes, nipples and
control cables for motor cycles and bicycles
57.1
57.1
Onward Leasing & Credit Sdn. Bhd.
Leasing company
51.2
51.2
100.0
100.0
100.0
100.0
50.5
50.5
Subsidiary of Oriental Rubber & Palm Oil Sdn. Berhad
- Oriental Boon Siew (M) Sdn. Bhd.
Housing developer, building contractor, property development and
investment holding
Oriental San Industries Sdn. Bhd.
Letting of properties and manufacturing and trading of plastic
articles and products
Kah Bintang Auto Sdn. Bhd.
Retailer of motor vehicles and trader of spare parts, accessories and
related component parts
Subsidiary of Kah Bintang Auto Sdn. Bhd.
- Kah Classic Auto Sdn. Bhd.
Dormant
Oriental Boon Siew (Mauritius) Pte. Ltd. #
Investment holding
155
Subsidiary of Oriental Boon Siew (Mauritius) Pte. Ltd.
- OAM Asia (Singapore) Pte. Ltd. #
Investment Holding
2012
2011
%
%
50.5
-
50.5
50.5
45.5
45.5
- PT. Gunung Sawit Selatan Lestari *
Oil palm plantation
45.5
45.5
- PT. Pratama Palm Abadi *
Oil palm plantation
45.5
45.5
- PT. Dapo Agro Makmur *
Oil palm plantation
45.5
45.5
60.0
60.0
60.0
60.0
- Lipro Mold Engineering Sdn. Bhd.
Manufacture and repair of moulds, jigs and fixtures
51.0
51.0
- AT-TS Marketing Sdn. Bhd.
Dormant. Commenced members’ voluntary liquidation during
the year.
60.0
60.0
- Armstrong Industries Sdn. Bhd.
Investment holding company
60.0
60.0
- Kasai Teck See (Malaysia) Sdn. Bhd.
Manufacturing and distribution of plastic articles and products
45.0
-
100.0
100.0
89.0
89.0
95.0
95.0
- OBS (Singapore) Pte. Ltd. #
Investment holding and granting of loans
Subsidiary of OBS (Singapore) Pte. Ltd.
- PT. Bumi Sawit Sukses Pratama *
Oil palm plantation
Teck See Plastic Sdn. Bhd.
Manufacture and distribution of plastic articles and products
Subsidiaries of Teck See Plastic Sdn. Bhd.
- Lipro Electrical Manufacturing Sdn. Bhd.
Manufacture of electrical items
Oriental International (Mauritius) Pte. Ltd. #
Investment holding
Subsidiaries of Oriental International (Mauritius) Pte. Ltd.
- Hymold (Su Zhou) Co., Ltd. *
Dormant. Commenced members’ voluntary liquidation on 1
January 2013
- Oriental Industries (Wuxi) Co. Ltd. *
Dormant
156
2012
2011
%
%
100.0
100.0
99.0
99.0
100.0
100.0
51.0
51.0
- Kah New Zealand Limited #
Hotelier (with golf course)
100.0
100.0
- Kah Australia Pty. Limited *
Hotelier and Investment holding
100.0
100.0
51.0
51.0
- Kah Power Products Pte. Ltd. #
Distribution of motor power products
100.0
100.0
- KM Agency Sdn. Bhd.
Insurance services for motor vehicles including cars
100.0
100.0
- Kingdom Properties Co. Limited
Investment holding
100.0
100.0
89.5
89.5
- Suanplu Bhiman Limited *
Investment holding
79.4
79.4
- Silver Beech Operations UK Limited *
Managing and operating of hotels
100.0
100.0
- Silver Beech Holdings Limited *
Investment holding
100.0
100.0
100.0
100.0
Kah Motor Company Sdn. Berhad
Distribution and retailing of motor vehicles and spare parts,
servicing, rental and leasing of motor vehicles; investment
holding as well as hotelier
Subsidiaries of Kah Motor Company Sdn. Berhad
- Boon Siew (Borneo) Sendirian Berhad *
Distribution of Honda motor cars and motor cycles and the
related spare parts
- Ultra Green Sdn. Bhd.
Land reclamation
- Happy Motoring Company Sdn. Bhd. *
Distribution of Honda motor cars and motor cycles and
sale of spare parts
Subsidiary of Kah Australia Pty. Limited
- Geographe Bay Motel Unit Trust *
Hotelier
Subsidiaries of Kingdom Properties Co. Limited
- Park Suanplu Holdings Co., Ltd. *
Hotelier
Subsidiaries of Silver Beech Holdings Limited
- Silver Beech (IOM) Limited *
Investment holding
157
2012
2011
%
%
60.3
60.3
60.3
60.3
- Armstrong Trading & Supplies Sdn. Bhd.
General trading of related automotive parts
60.3
60.3
- Armstrong Component Parts (Vietnam) Co., Ltd *
Manufacturing and assembly of parts and components for
automobiles, motorcycle and others
60.3
60.3
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
91.0
91.0
74.9
74.9
63.7
63.7
63.7
59.2
63.7
63.7
Armstrong Auto Parts Sdn. Berhad
Manufacture of seats, press, diecasts parts, shock absorbers,
suspension and electrical components for motor cycles and motor
vehicles
Subsidiaries of Armstrong Auto Parts Sdn. Berhad
- Armstrong Realty Sdn. Bhd.
Dormant
Jutajati Sdn. Bhd.
Investment holding
Subsidiaries of Jutajati Sdn. Bhd.
- Kwong Wah Enterprise Sdn. Bhd.
Investment holding
Subsidiaries of Kwong Wah Enterprise Sdn. Bhd.
- North Malaya Engineers Trading Company Sdn. Berhad* *
Manufacture of wire netting, wire mesh, barbed wire, weld
mesh, nails and building materials
- Lipro Trading Sdn. Bhd.
Distributor of cement
- Simen Utara Sdn. Bhd. *
Distributor of cement, concrete products and building
materials
Subsidiaries of Simen Utara Sdn. Bhd.
- Unique Pave Sdn. Bhd. *
Manufacturer of and dealer of concrete products
- Unique Mix (Penang) Sdn. Bhd. *
Manufacturer and dealer of concrete products
Subsidiary of Unique Mix (Penang) Sdn. Bhd.
- Konkrit Utara Sdn. Bhd. *
Dealer of concrete products
- Unique Mix Sdn. Bhd. *
Sale and distribution at ready-mixed concreate
158
2012
2011
%
%
100.0
100.0
100.0
100.0
50.5
50.5
46.7
46.7
- PT Gunungsawit Binalestari *
Oil palm plantation
46.7
46.7
- PT Oriental Kyowa Industries *
Manufacture of plastic technical and industrial goods and
equipment. Under members’ voluntary liquidation.
72.8
72.8
71.2
71.2
50.5
50.5
50.5
50.5
Melaka Straits Medical Centre Sdn. Bhd.
Intended activity is to operate a medical centre and nursing college
51.0
51.0
Loh Boon Siew Education Sdn. Bhd.
Dormant
70.0
70.0
70.0
70.0
North Malaya Engineers Overseas Sdn. Bhd.
Investment holding
Subsidiary of North Malaya Engineers Overseas Sdn. Bhd.
- North Malaya (Xiamen) Steel Co. Ltd. *
Production of steel wire and its related product, and
automobile spare parts
Selasih Permata Sdn. Bhd.
Investment holding
Subsidiaries of Selasih Permata Sdn. Bhd.
- PT Gunung Maras Lestari *
Oil palm plantation
- Oriental Kyowa Plastic Industries (Shanghai Pudong
New Area) Co. Ltd. *
Manufacture of plastic technical and industrial goods and
equipment. Ceased operations in August 2011.
- Oriental Asia (Mauritius) Pte. Ltd. #
Investment holding
Subsidiary of Oriental Asia (Mauritius) Pte. Ltd.
- Unique Mix (Singapore) Pte. Ltd. #
Investment holding
Subsidiary of Loh Boon Siew Education Sdn. Bhd.
- Nilam Healthcare Education Centre Sdn. Bhd.
Institution of providing nursing program
* not audited by KPMG.
# audited by member firms of KPMG International.
159
All the subsidiaries are incorporated in Malaysia except for :
Country of incorporation
- Happy Motoring Company Sdn. Bhd.
Brunei Darulsalam
- Kah Australia Pty Ltd
Australia
- Geographe Bay Motel Unit Trust
Australia
- Kah New Zealand Limited
New Zealand
- PT Oriental Kyowa Industries
Republic of Indonesia
- PT Gunung Maras Lestari
- PT Gunungsawit Binalestari
- PT Bumi Sawit Sukses Pratama
- Oriental Kyowa Plastic Industries (Shanghai Pudong New Area)
Co Ltd
China
- North Malaya (Xiamen) Steel Co Ltd
China
- Oriental International (Mauritius) Pte Ltd
Mauritius
- Oriental Boon Siew (Mauritius) Pte Ltd
Mauritius
- Hymold (Su Zhou) Co., Ltd
China
- Armstrong Component Parts (Vietnam) Co., Ltd
Vietnam
- Oriental Industries (Wuxi) Co. Ltd
China
- Oriental Asia (Mauritius) Pte Ltd
Mauritius
- Kah Power Products Pte Ltd
Singapore
- OBS (Singapore) Pte Ltd
Singapore
- Unique Mix (Singapore) Pte Ltd
Singapore
-
OAM Asia (Singapore) Pte. Ltd.
Singapore
-
PT. Gunung Sawit Selatan Lestari
-
PT. Pratama Palm Abadi
-
P.T Dapo Agro Makmur
-
Park Suanplu Holdings Co. Ltd
Thailand
-
Suanplu Bhiman Limited
Thailand
-
Silver Beech Holdings Limited
United Kingdom
-
Silver Beech Operations UK Limited
United Kingdom
-
Silver Beech (IOM) Limited
United Kingdom
160
37. Supplementary financial information on the breakdown of realised
and unrealised profits or losses
The breakdown of the retained earnings of the Group and of the Company as at 31 December, into
realised and unrealised profits, pursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market
Listing Requirements, are as follows :
Group
2012
2011
RM’000
RM’000
Total retained earnings of the
Company and its subsidiaries :
- realised
- unrealised
Total share of retained earnings of
associates
- realised
- unrealised
Less : Consolidation adjustments
Total retained earnings
Company
2012
2011
RM’000
RM’000
4,539,086
(14,039)
4,326,404
(50,419)
284,190
6,754
256,648
(8,925)
4,525,047
4,275,985
290,944
247,723
291,291
(5,607)
242,429
1,491
-
-
4,810,731
4,519,905
290,944
247,723
(1,429,636)
(1,283,610)
-
-
3,381,095
3,236,295
290,944
247,723
The determination of realised and unrealised profits is based on the Guidance of Special Matter No.1,
Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to
Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of
Accountants on 20 December 2010.
161
Statement by Directors pursuant to
Section 169(15) of the Companies Act, 1965
In the opinion of the Directors, the financial statements set out on pages 61 to 160 are drawn up in accordance
with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view
of the financial position of the Group and of the Company as of 31 December 2012 and of their financial
performance and cash flows for the financial year then ended.
In the opinion of Directors, the information set out in Note 37 on page 161 to the financial statements has been
compiled in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised
Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing
Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed
by Bursa Malaysia Securities Berhad.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors :
Director
Director
Penang,
162
Statutory declaration pursuant to
Section 169(16) of the Companies Act, 1965
I, Wong Tet Look, the officer primarily responsible for the financial management of Oriental Holdings Berhad,
do solemnly and sincerely declare that the financial statements set out on pages 61 to 161 are, to the best of my
knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true,
and by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the above named at Georgetown in the State of Penang on 23 April 2013.
………………………………………………
Wong Tet Look
Before me :
GOH SUAN BEE (No. P.125)
Pesuruhjaya Sumpah
(Commissioner for Oaths)
Penang
163
Independent auditors’ report to the stockholders of
Oriental Holdings Berhad
Report on the Financial Statements
We have audited the financial statements of Oriental Holdings Berhad, which comprise the statements of
financial position as at 31 December 2012 of the Group and of the Company, and the statements of
comprehensive income, changes in equity and cash flows of the Group and of the Company for the year then
ended, and notes, comprising a summary of significant accounting policies and other explanatory information,
as set out on pages 61 to 160.
Directors’ Responsibility for the Financial Statements
The Directors of the Company are responsible for the preparation of these financial statements so as to give a
true and fair view in accordance with Financial Reporting Standards and the requirements of the Companies
Act, 1965 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due
to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on our judgment, including the assessment of risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a
true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made
by the Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the
Company as of 31 December 2012 and of their financial performance and cash flows for the year then ended in
accordance with financial reporting standard and the requirements of the Companies Act, 1965 in Malaysia.
164
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:
a)
In our opinion, the accounting and other records and the registers required by the Act to be kept by the
Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance
with the provisions of the Act.
b) We have considered the accounts and the auditors’ reports of all the subsidiaries of which we have not
acted as auditors, which are indicated in Note 36 to the financial statements.
c)
We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company’s
financial statements are in form and content appropriate and proper for the purposes of the preparation of
the financial statements of the Group and we have received satisfactory information and explanations
required by us for those purposes.
d) The audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse
comment made under Section 174(3) of the Act.
Other Reporting Responsibilities
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The
information set out in Note 37 on page 161 to the financial statements has been compiled by the Company as
required by the Bursa Malaysia Securities Berhad Listing Requirements and is not required by the Financial
Reporting Standards. We have extended our audit procedures to report on the process of compilation of such
information. In our opinion, the information has been properly compiled, in all material respects, in accordance
with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the
Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the
Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities
Berhad.
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the
Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other
person for the content of this report.
KPMG
AF 0758
Chartered Accountants
Lee Kean Teong
1857/02/14 (J)
Chartered Accountant
Penang
165
Ten Largest Properties of the Group as at
31 December 2012
Location
Description
Land Area
(sq.metres)
Tenure
Age of
Building
(Years)
Net Book
Date of
Value
Acquisition (RM million)
The Thistle Bloomsbury
Hotel
Bloomsbury Way
London WC1A 2SD
Hotel
8,027
Freehold
113
13 Feb 2012
202.9
Somerset Park Suanplu
No 39 Soi Suanplu
South Sathorn Road
Bangkok 10120
Thailand
Service
Apartment
6,555
Freehold
16
15 Sep 2011
108.2
Oil palm
plantation,
crude palm oil
mill and
administrative
office
12,704
(hectare)
Leasehold
(30 years
Expiring
2028)
17
13 Sep 1994
82.4
90, William Street
Sydney, NSW 2011
Australia
Hotel
1,300
Freehold
40
6 Jun 1993
79.3
100 William Street
Sydney NSW 2011
Australia
Land and
office
building
1,300
Freehold
40
20 Sep 1994
61.0
Kecamatan Simpang
Rimba dan Payung,
Kabupaten Bangka
Selatan, Pulau Bangka
Propinsi Kepulauan Bangka
Belitung
New
development
area for oil
palm
16,000
(hectares)
Rights
Concession
6
17 Nov 2006
58.4
Lot No. MK1-2639X
255 Alexandra Road
Singapore
Showroom,
workshop and
office
9,636
Leasehold
(99 years
expiring
2051)
13
4 May 1999
56.2
Hotel
1,039
Freehold
26
3 Dec 1982
51.0
Hotel and
vacant land
6,900
Freehold
24
21 Apr 1993
48.3
Kecamatan Bakem
Kecamatan Pemali
Kecamatan Puding Besar
Kabupaten Bangka Induk
Pulau Bangka
Propinsi Kepulauan
Bangka Belitung
Lot 402 T.S. II
Bencoolen Street,
Singapore
6, 8 & 9, Queens Road
South Melbourne
Victoria 3004
Australia
166
Ten Largest Properties of the Group as at
31 December 2012 (cont’d)
Location
Desa Mayang &
Desa Simpang Gong,
Kecamatan Simpang Tertip
Desa Belo Laut & Desa Air
Belo, Kecamatan Mentok
Kabupaten Bangka Barat
Pulau Bangka
Propinsi Kepulauan
Bangka Belitung
Description
Oil palm
plantation,
crude palm oil
mill and
administrative
office
Land Area
(sq.metres)
9,098
(hectares)
167
Tenure
Leasehold
(30 years
expiring
2031)
Age of
Net Book
Building
Date of
Value
(Years) Acquisition (RM million)
15
11 May 1995
42.1
Stockholding Statistics
STOCKHOLDING STATISTICS AS AT 25 APRIL 2013
AUTHORISED STOCK CAPITAL
:
RM1,000,000,000/=
ISSUED AND FULLY PAID-UP CAPITAL
:
RM620,393,638/= (including 31,808 treasury stocks)
CLASS OF STOCK
:
Ordinary Stocks of RM1/= each
VOTING RIGHTS
:
On a show of hands - One vote for every stockholder
On a poll - One vote for every ordinary stock held
ANALYSIS OF STOCKHOLDINGS
Size of Stockholding
No of
Stockholders/
Depositors
No. of Stocks
% of Issued
Capital
331
898
3,396
1,125
225
5
5,980
12,438
603,568
13,428,344
32,558,572
181,042,561
392,748,155
620,393,638
0.00
0.10
2.16
5.25
29.18
63.31
100.00
1 - 99
100 - 1,000
1,001 - 10,000
10,001 - 100,000
100,001 to less than 5% of issued stocks
5% and above of issued stocks
Total
SUBSTANTIAL STOCKHOLDERS
Name
1.
2.
3.
4.
5.
6.
Boon Siew Sdn Bhd
Employees Provident Fund Board
Penang Yellow Bus Company Bhd
Aberdeen Asset Management PLC
and its Subsidiaries
Mitsubishi UFJ Financial Group, Inc.
No of stocks
Direct
% of
Issued
Capital
No of stocks
Deemed
% of
Issued
Capital
266,729,662
54,547,016
32,848,477
1,200
64,120,100
43.00
8.79
5.30
10.34
69,569,757 (a)
346,964,026 (b)
-
11.21
55.93
-
-
-
64,120,100 (c)
10.34
(a) Deemed interested via Penang Yellow Bus Company Bhd, Bayview Hotel Sdn Bhd, Boon Siew Development
Sdn Bhd, Boontong Estates Sdn Bhd and Southern Perak Plantation Sdn Bhd.
(b) Deemed interested via Boon Siew Sdn Bhd, Penang Yellow Bus Company Bhd, Bayview Hotel Sdn Bhd, Loh
Boon Siew Holdings Sdn Bhd, Loh Kar Bee Holdings Sdn Bhd, Boon Siew Development Sdn Bhd, Boontong
Estates Sdn Bhd and Southern Perak Plantations Sdn Bhd.
(c) Deemed interested via Aberdeen Asset Management PLC and its subsidiaries.
168
THIRTY LARGEST STOCKHOLDERS AS AT 25 APRIL 2013
Name
1
No. of
Stocks
MALAYSIA NOMINEES (TEMPATAN) SENDIRIAN BERHAD
% of Issued
Capital
133,365,188
21.50
133,364,474
21.50
47,447,016
7.65
45,723,000
7.37
32,848,477
5.30
25,119,424
4.05
21,848,407
3.52
BOON SIEW SDN BERHAD (00-00198-000)
2
CITIGROUP NOMINEES (TEMPATAN) SDN BHD
BOON SIEW SDN BHD
3
EMPLOYEES PROVIDENT FUND BOARD
4
HSBC NOMINEES (ASING) SDN BHD
BNP PARIBAS SECS SVS LUX FOR ABERDEEN GLOBAL
5
PENANG YELLOW BUS COMPANY BHD
6
CITIGROUP NOMINEES (ASING) SDN BHD
HONDA MOTOR COMPANY LTD
7
BAYVIEW HOTEL SDN BHD
8
MAYBANK NOMINEES (TEMPATAN) SDN BHD
MAYBANK TRUSTEES BERHAD FOR PUBLIC ITTIKAL FUND
(N14011970240)
9,500,000
1.53
9
CIMSEC NOMINEES (TEMPATAN) SDN BHD
CIMB FOR SOUTHERN PERAK PLANTATIONS SENDIRIAN
BERHAD (PB)
8,000,000
1.29
10
7,568,031
1.22
5,300,000
0.85
4,432,966
0.72
LOH BOON SIEW HOLDINGS SDN BHD
11
EMPLOYEES PROVIDENT FUND BOARD (ABERDEEN)
12
BOONTONG ESTATES SDN BERHAD (00-00200-000)
13
CITIGROUP NOMINEES (ASING) SDN BHD
CBNY FOR DIMENSIONAL EMERGING MARKETS VALUE
FUND
3,680,879
0.59
14
CHINCHOO INVESTMENT SDN.BERHAD
3,369,960
0.54
15
KUMPULAN WANG PERSARAAN (DIPERBADANKAN)
(ABERDEEN)
3,200,000
0.52
16
3,096,576
0.50
2,966,906
0.48
LOH KAR BEE HOLDINGS SDN BHD
17
LIM SU TONG
18
CARTABAN NOMINEES (ASING) SDN BHD
SSBT FUND AM4N FOR ABERDEEN INSTITUTIONAL
COMMINGLED FUNDS LLC
2,907,000
0.47
19
EXEMPT AN FOR AMERICAN INTERNATIONAL ASSURANCE
BERHAD
2,851,200
0.46
20
KEY DEVELOPMENT SDN. BERHAD
2,736,000
0.44
169
Name
No. of
Stocks
% of Issued
Capital
21
GOLDEN FRESH SDN BHD
2,700,000
0.44
22
2,140,000
0.35
BNP PARIBAS SECS SVS PARIS FOR HI-KABL-FONDS
23
CARTABAN NOMINEES (ASING) SDN BHD
RBC INVESTOR SERVICES BANK FOR GLOBAL EMERGING
MARKETS SMALLCAP (DANSKE INVEST)
2,130,000
0.34
24
1,919,300
0.31
1,870,000
0.30
ING INSURANCE BERHAD (INV-IL PAR)
25
TOKIO MARINE LIFE INSURANCE MALAYSIA BHD
AS BENEFICIAL OWNER (PF)
26
EMPLOYEES PROVIDENT FUND BOARD
1,800,000
0.29
27
1,708,278
0.28
1,500,000
0.24
1,439,907
0.23
1,390,000
0.22
517,922,989
83.50
TONG YEN SDN BHD (00-00203-000)
28
EXEMPT AN FOR DANSKE BANK A/S (CLIENT HOLDINGS)
29
BOON SIEW DEVELOPMENT SDN BHD
30
EXEMPT AN FOR BNP PARIBAS SECURITIES SERVICES
(SINGAPORE - SGD)
170
DIRECTORS’ STOCKHOLDINGS AS AT 25 APRIL 2013
Name of Directors
1.
2.
486,755
3.
4.
5.
6.
7.
Direct Interest
181,149
%
Indirect Interest
0.08
0.03
457,724
(a)
0.07
161,872
(a)
0.03
(a)
0.62
2,966,906
0.48
3,872,626
-
-
-
38,307
0.01
25,804
Sharifah Intan Binti S. M. Aidid (*)
18,000
0.00
-
1,200
0.00
(a)
0.00
-
346,964,026
55.93
(c)
0.00
-
-
5,161
9.
-
-
-
10.
Satoshi Okada
-
-
-
Datin Loh Ean (alternate director to
-
(b)
8.
11.
%
(a)
161,872
0.03
181,149
0.03
172,032
0.03
-
-
-
-
-
-
Dato’ Robert Wong Lum Kong, DSSA, JP)
12.
Tan Kheng Hwee (alternate director to
Dato’ Seri Loh Cheng Yean)
13.
Dato’ Sri Tan Hui Jing (alternate director to
Dato’ Dr Tan Chong Siang)
(a) These are stocks held in the name of the spouses and children and are regarded as interests of the Directors
in accordance with Section 134(12)(c) of the Companies Act, 1965.
(b) Deemed interested via Boon Siew Sdn Bhd, Penang Yellow Bus Company Bhd, Bayview Hotel Sdn Bhd, Loh
Boon Siew Holdings Sdn Bhd, Loh Kar Bee Holdings Sdn Bhd, Boon Siew Development Sdn Bhd, Boontong
Estates Sdn Bhd and Southern Perak Plantations Sdn Bhd.
(c) Deemed interest via Phipps Holdings Sdn. Bhd.
*
She also holds 227,318 shares and 100,000 shares in Armstrong Auto Parts Sdn Bhd and Teck See Plastic
Sdn Bhd respectively.
171
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172
--------------------------------------------------------------------------------------------------------------------- -----------
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173
--------------------------------------------------------------------------------------------------------------------- -----------
---------------------------------------------------------------------------------------------------------------------- ----------
174
PROXY FORM
Number of Stocks
CDS Account No.
-
I/We,
NRIC No
of
being a stockholder/stockholders of Oriental Holdings Berhad hereby appoint
of
or failing him/her
of
or failing him/her, the CHAIRMAN OF THE MEETING as my/our proxy, to vote for me/us and on my/our behalf at the
FIFTY-FIRST ANNUAL GENERAL MEETING of the Company to be held on Wednesday, 12 June 2013 at 2:30 p.m. at
Sri Mas Ballroom, Level 4, Bayview Hotel Georgetown Penang, 25A Farquhar Street, 10200 Penang or at any
adjournment thereof.
My/our proxy is to vote on either on a show of hands or on a poll as indicated below with an “X”
ORDINARY RESOLUTIONS
1.
To receive the audited Financial Statements for the year ended 31 December 2012
2.
To declare a Final Single Tier Dividend
3.
To re-elect Dato’ Robert Wong Lum Kong, DSSA, JP
4.
To re-elect Dato’ Dr Tan Chong Siang
5.
To re-elect YM Tengku Tan Sri Dato’ Seri Ahmad Rithauddeen
Bin Tengku Ismail
6.
To re-elect Puan Sharifah Intan Binti S M Aidid
7.
To re-elect Ms Mary Geraldine Phipps
8.
To re-elect Mr Satoshi Okada
9.
To approve the Directors’ Fees
10.
To re-appoint Messrs KPMG
11.
12.
13.
14.
15.
16.
17.
To approve Recurrent Related Party Transactions with:a) Boon Siew Sdn Bhd Group
b) Dato’ Syed Mohamad Bin Syed Murtaza and family
c) Honda Motor Co., Ltd.
d) Karli Boenjamin
e) Ooi Soo Pheng
f)
Tan Liang Chye
g) Datuk Loh Kian Chong
18.
To approve the Proposed Renewal of Stock Buy-Back
19.
To approve the Retention as Independent Director
Signed this ________day of _______________2013.
FOR
AGAINST
Signature of Stockholder
Notes :
1.
A member entitled to attend and vote at this meeting may appoint a proxy to attend and, on a poll, to vote on his behalf. A Member may appoint 2 proxies to attend on
the same occasion. A proxy may but need not be a Member and the provisions of Section 149(1)(b) of the Act shall not, apply to the Company. If a Member appoints 2
proxies, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy.
2.
Where a Member of the Company is an exempt authorised nominee which hold ordinary stocks in the Company for multiple beneficial owner in one (1) securities
account (“omnibus account”), there shall be no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it
holds.
An exempt authorised nominee refers to an authorized nominee defined under the Central Depositories Act which is exempted from compliance with the provisions of
subsection 25A(1) of Central Depositories Act.
3.
If the appointer is a corporation, the Proxy Form must be executed under the Common Seal of the Company or under the hand of its attorney duly authorised in writing.
4.
For a proxy to be valid, the Form of Proxy duly completed must be deposited at the Registered Office of the Company, Suite 2-1, 2nd Floor, Menara Penang Garden,
42A Jalan Sultan Ahmad Shah, 10050 Penang, Malaysia not less than forty-eight (48) hours before the time appointed for holding the meeting or at any adjournment
thereof.
5.
Should you desire your Proxy to vote on the Resolutions set out in the Notice of Meeting, please indicate with an “X” in the appropriate space. If no specific direction as
to voting is given, the Proxy will vote or abstain at his discretion.
6.
For purpose of determining who shall be entitled to attend this meeting, the Company shall be requesting Bursa Malaysia Depository Sdn. Bhd. to make available to the
Company pursuant to Article 80(3) of the Articles of Association of the Company and Paragraph 7.16(2) of the Main Market Listing Requirements of Bursa Malaysia
Securities Berhad, a Record of Depositors (“ROD”) as at 5 June 2013 and only a Depositor whose name appears on such ROD shall be entitled to attend this meeting or
appoint proxy to attend and/or vote in his/her behalf.
175
.....................................................……......…… Fold Along this line.......................................................…………..
AFFIX
POSTAGE
STAMP
The Company Secretaries
Oriental Holdings Berhad
42A Jalan Sultan Ahmad Shah
10050 Penang
.....................................................……......…… Fold Along this line.......................................................……………
176

OHB Annual Report 2012 - Oriental Holdings Berhad

Transcription

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